The current account posted a $100 million surplus in November, which may change the trend of deficits in previous months of the current fiscal year.
However, data provided by the State Bank of Pakistan (SBP) shows that imports were curtailed to improve trade deficit figures during the month. The previous month, October, had posted a current account deficit of $291 million.
The previous fiscal year, FY25, surprised many by posting a net current account surplus of $1.932 billion and was widely celebrated by the government as a major positive for the economy. The surplus was also the result of tight import restrictions, which ultimately kept the economic growth rate well below the desired level. Policymakers have yet to announce a strategy to move away from import-led economic growth.
The data shows that the $100 million surplus in November was much lower than the $709 million surplus in the same month of the previous fiscal year.
In November this year, both exports and imports declined, which helped the current account post a surplus. Exports fell by 10% while imports dropped by 12% compared to October.
With this November surplus, the current account deficit for the five months from July to November FY26 has reduced to $812 million, compared with a $503 million surplus in the same period last fiscal year.
The trade deficit swelled to $37.17 billion in the first five months of FY26, making it harder for economic managers to rein in this trend.
SBP data shows that goods exports during the first five months were $12.79 billion, compared to $13.212 billion in the same period last year. Similarly, imports of goods during the first five months of FY26 were $25.559 billion, compared to $23.011 billion in the same period, showing an upward trend. Higher imports caused a large trade deficit, which ultimately puts pressure on the current account.
So far, remittance inflows have remained steady, averaging $3.2 billion per month, and are exceeding last year’s record inflows of $38 billion. The government expects remittances to reach $40 billion in FY26.
Higher remittances provide the State Bank room to buy dollars from the interbank market, boosting foreign exchange reserves and partially meeting external debt obligations. Most of the dues for debt servicing in FY25 were rolled over, and the situation in FY26 is not much different.
So far, remittance inflows have remained steady, averaging $3.2 billion per month, and are exceeding last year’s record inflows of $38 billion. The government expects remittances to reach $40 billion in FY26.
Higher remittances provide the central bank the room to buy dollars from the interbank market, boosting foreign exchange reserves and partially meeting external debt obligations. Most of the dues for debt servicing in FY25 were rolled over, and the situation in FY26 is not much different.
While briefing analysts after the Monetary Policy was announced on Monday, SBP Governor Jameel Ahmed said the external debt servicing requirement for FY26 is $25.8 billion, of which $9.7 billion has already been paid or rolled over. For the remainder of this fiscal year, net external debt servicing stands at $6.9 billion, excluding rollovers.
