Rising imports push Pakistan’s current account into deficit in October

Pakistan’s current account returned to deficit in October 2025, posting a shortfall of $112 million, data from the State Bank of Pakistan (SBP) revealed on Monday. This follows a modest surplus of $83 million in September, and a stronger surplus of $296 million in the same month last year.

The shift reflects a widening trade gap as imports surged and exports fell. According to SBP figures, Pakistan’s total exports of goods and services in October reached $3.57 billion, down nearly 4 percent from $3.71 billion in October 2024. At the same time, imports jumped to $6.32 billion, marking a 13 percent increase over last year’s $5.58 billion.

Remittances provided a stabilising cushion, with workers’ inflows rising to $3.42 billion, up 12 percent from $3.05 billion in October 2024. Analysts say these remittances remain crucial in counterbalancing the country’s widening trade deficit.

“Pakistan’s external account showed mixed signals in October. The deficit was largely driven by a rise in imports outpacing exports as domestic demand recovered,” said Waqas Ghani, Head of Research at JS Global. He added that remittances continue to play a key role in cushioning the external account.

Cumulatively, during the first four months of the current fiscal year, the current account deficit reached $733 million, a steep increase of 256 percent compared with $206 million during the same period last year.

Despite the pressures on the current account, Pakistan’s foreign exchange reserves strengthened, rising to $14.50 billion, up 29 percent year-on-year. The growth in reserves provides some buffer against ongoing external pressures, analysts noted, though structural challenges in trade and financing remain.