KARACHI: Pakistan’s current account swung back to a deficit in October after a surplus in the previous month due to a trade gap resulting from increased imports.
The current account shortfall was $112 million, compared with a surplus of $83 million in September, according to central bank data published on Monday.The country reported a surplus of $296 million in October 2024.
October’s deficit number is lower than analysts expected, with the goods trade deficit reported by the State Bank of Pakistan being 21 per cent less than the data from the Pakistan Bureau of Statistics. Historically, this variance has been around 10 per cent.
Pakistan saw a current account deficit of $773 million during the first four months of the fiscal year 2026, a 256 per cent increase compared with the same period last year.“The current account turned into deficit in October due to a wider trade deficit driven by higher goods imports and an increase in the services deficit,” said Awais Ashraf, director of research at AKD Securities Limited.
“On a sequential basis, higher interest payments and dividend repatriations also contributed to the larger deficit. Meanwhile, a strong increase in remittances partially offset the impact on both an annual and sequential basis,” Awais added.
The balance of payments numbers come as Pakistan expects to receive the next loan tranche from the International Monetary Fund (IMF) on December 9. The global lender has scheduled a meeting of its executive board on December 8 to approve an immediate release of $1.2 billion to Pakistan under two separate programs. Last month, Pakistan and the IMF reached a staff-level agreement on the second review of the $7 billion Extended Fund Facility (EFF) and the first review of the $1.4 billion Resilience and Sustainability Fund (RSF). As part of this agreement, Pakistan is set to receive $1 billion from the EFF and $200 million from the RSF.
The SBP expects the current account deficit to be in a range of zero to 1.0 per cent of GDP in FY26. The bank’s reserves have increased nearly fivefold from a low of $3 billion in 2023. The SBP anticipates that the contained current account deficit, along with the realisation of planned official inflows, will boost its reserves to $15.5 billion by December and approximately $17.8 billion by June 2026.