By Staff Reporter
KARACHI: The current account deficit narrowed to $328 million in July, as a jump in goods exports to a 19-month high offset accelerating import growth, according to data released Tuesday by the State Bank of Pakistan.
The shortfall compares with a revised $814 million deficit in June — up from an initially reported $649 million — and a $529 million gap in July 2025. The improvement reflected a 17% increase in exports from the prior month and a 9% rise from a year earlier, bringing goods exports to $3.01 billion, their strongest monthly showing since late 2024. Imports held roughly steady from June at $6.15 billion.
“Overall, the current account remained in deficit, but the shortfall narrowed significantly on a monthly and yearly basis,” Topline Research said in a note.
Even so, the trade data point to a widening structural imbalance at the start of the new fiscal year. Exports rose 9.4% year-on-year in July, while imports climbed 13.4%, according to SBP memorandum indicators — a gap that pushed the goods trade deficit to $3.15 billion, from $2.68 billion a year earlier.
The services account added to the pressure. Services exports totaled $927 million against imports of $1.16 billion, producing a $228 million deficit and lifting the combined goods-and-services trade gap to $3.37 billion for the month.
Primary income remained deeply negative, with credits of just $81 million against debits of $929 million, a shortfall of $848 million. Combined, the deficits on trade and primary income reached $4.22 billion in July.
That gap was largely bridged by remittances. Secondary income posted a $3.89 billion surplus, driven by $3.63 billion in workers’ remittances and $252 million in other current transfers — enough to offset most, but not all, of the trade and income shortfall.
Excluding official transfers, the current account deficit was somewhat wider, at $384 million, indicating official inflows provided modest additional support during the month.
The July reading follows a volatile stretch for Pakistan’s external accounts: a $500 million surplus in May gave way to the $814 million deficit in June. The April-June quarter posted a $590 million deficit, while the full fiscal year through June showed a $304 million shortfall on one measure and a $139 million deficit for FY26 overall on another — reversing a $1.84 billion surplus in the prior fiscal year. Record remittances during FY26 were not enough to offset elevated imports against largely stagnant exports, SBP data showed.
Despite the current account shortfall, Pakistan’s overall balance of payments posted a $1.39 billion surplus in July, with reserve assets declining by a matching $1.39 billion under the balance-of-payments presentation.
Gross reserves, including cash foreign-currency holdings and excluding unsettled claims on the Reserve Bank of India, stood at $18.34 billion in July, up from $15.65 billion in the comparable period a year earlier. SBP reserves excluding cash reserve requirements totaled $17.15 billion, while commercial banks held a further $971 million net of reserve requirements.
The central bank noted that merchandise trade figures used in the balance-of-payments calculation are drawn from exchange records and may diverge from customs-based trade data.
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