Current account posts $356m deficit in September

October 16, 2026 (MLN): Pakistan’s current account deficit widened to $356mn in September from a revised $73mn in August, and a reversal from the $133mn surplus recorded in September last year, taking the first-quarter (July-September) FY27 deficit to $874mn, 15.8% wider than the $755mn a year earlier, according to Balance of Payments data released by the State Bank of Pakistan (SBP).

The widening reflects a goods trade gap that keeps growing as imports outpace exports, with workers’ remittances and other secondary income cushioning only part of the pressure. The first-quarter deficit is already about 2.2 times the $391mn recorded for the whole of FY26.

First Quarter Deficit Already More Than Double FY26’s Full-Year Gap

The deficit on goods, services and primary income combined widened to $12.48bn in 1QFY27 from $10.82bn a year earlier. Secondary income of $11.61bn offset most of it.

Imports Outrun Exports

Goods imports rose 14.3% year-on-year to $17.78bn in 1QFY27, while exports grew a slower 7.7% to $8.45bn. That pushed the goods trade deficit 21.1% wider to $9.33bn.

Goods exports rose 22.9% month-on-month in September to $3.02bn, but imports climbed 13.0% to $6.17bn from $5.46bn in August.

The monthly goods deficit widened 4.9% to $3.16bn. It was 30.4% wider than the $2.42bn recorded in September last year, as imports rose 22.7% year-on-year against a 15.5% rise in exports.

Services offered little relief. The services deficit was $281mn in September, up from $274mn in August and $155mn a year earlier.

For the quarter, however, services exports rose 22.8% to $2.72bn, which kept the cumulative services gap marginally narrower at $831mn. Combined, the goods and services deficit was $3.44bn in September, up 4.7% from August and 33.5% from a year ago.

Remittances Keep Secondary Income Strong

Workers’ remittances reached $10.88bn in 1QFY27, up 14.0% from $9.54bn a year earlier. September inflows of $3.59bn were up 12.7% year-on-year but 1.9% lower than August’s $3.66bn.

Secondary income rose 15.4% to $11.61bn in the quarter. The September figure of $3.87bn was almost flat on August’s $3.89bn but 14.2% higher than a year ago.

The primary income deficit, which mainly reflects profit repatriation and debt servicing, stood at $792mn in September, up 16.6% from August and 16.0% from a year earlier. For the quarter, the deficit edged up 2.1% to $2.32bn, as primary income debit fell slightly to $2.56bn while primary income credit dropped 22.8% to $244mn.

The financial account recorded net inflows of $4.16bn in 1QFY27, against $726mn in the same period last year. Portfolio investment was the main driver.

Portfolio investment in Pakistan turned to an inflow of $2.93bn from an outflow of $631mn a year earlier, with debt securities accounting for $2.96bn. Most of it arrived in September alone, when debt securities recorded an inflow of $2.89bn. Equity portfolio investment saw a small net outflow of $28mn.

Net direct investment inflows rose 28.9% to $714mn, led by a 20.0% increase in direct investment in Pakistan to $720mn.

Other investment saw a net inflow of $517mn, against $809mn a year ago. Deposit-taking corporations took on $728mn in net liabilities, compared with $168mn a year earlier.

The general government made net repayments of $663mn, against net incurrence of $381mn last year. General government disbursements slipped 2.5% to $1.23bn, while amortization more than doubled to $2.08bn from $946mn. Repayments of other long-term loans rose to $1.60bn from $724mn, and IMF repayments rose to $206mn from $122mn.

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