Pakistan’s external account came under pressure in August 2025, as the current account deficit widened to $245 million, according to the State Bank of Pakistan (SBP). The figure, released on Thursday, highlights the challenge of sustaining the recent surplus momentum that had marked FY25. Observers and economic guardians note that the country’s external stability now hinges on maintaining strong remittance inflows, controlled imports, and consistent export performance.
Pakistan’s Current Account Performance in FY26 So Far
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The August deficit of $245 million follows July 2025’s revised deficit of $379 million.
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In comparison, August 2024 recorded a deficit of only $82 million, signaling rising external account pressures.
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During the first two months of FY26 (July–August), the current account stood at a deficit of $624 million, up from $430 million in the same period last year.
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Pakistan had closed FY25 with a $2.1 billion surplus, its first in 14 years, mainly supported by a 27% surge in workers’ remittances.
Key Details Table
| Indicator | August 2025 | July 2025 (Revised) | August 2024 | FY25 Outcome |
|---|---|---|---|---|
| Current Account Balance | -$245m | -$379m | -$82m | +$2.1b |
| Trade Balance (Goods) | -$2.48b | – | – | – |
| Exports of Goods (FOB) | $2.51b | – | – | – |
| Imports of Goods (FOB) | $4.98b | – | – | – |
| Services Balance | -$437m | – | – | – |
| Workers’ Remittances | $3.14b | $3.21b | – | $38.3b (+27%) |
Trade and Services Deficit: Key Pressure Points
Economic observers note that the trade imbalance remains a persistent challenge:
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Exports of goods stood at $2.51 billion in August 2025, while imports reached $4.98 billion, creating a trade deficit of $2.48 billion.
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The services sector also posted a deficit of $437 million, with exports at $671 million against imports of $1.1 billion.
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Together, these widened gaps are eating into the stability gains from remittances.
Role of Remittances in Current Account Stability
Workers’ remittances continue to act as the guardian of Pakistan’s external account:
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In August 2025, inflows stood at $3.14 billion, slightly lower than $3.21 billion in July 2025.
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Despite the monthly dip, remittances remain strong compared to historic levels and remain the backbone of external account sustainability.
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Analysts emphasize that maintaining inflows above $3 billion per month is crucial for offsetting the trade gap.
Important Points
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Pakistan posted a $245 million deficit in August 2025, highlighting rising external pressures.
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The country closed FY25 with a rare surplus of $2.1 billion, mainly due to strong remittance inflows.
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Trade and services deficits are undermining external stability.
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Observers and economic guardians stress the importance of controlled imports and export growth.
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Remittances remain the key driver of stability, though slightly weaker in August.
FAQs
Q1: Why did Pakistan’s current account move into deficit in August 2025?
The deficit was driven by a large trade gap in goods and services, which outweighed strong inflows from remittances.
Q2: How important are remittances to Pakistan’s economy?
Very important. With inflows of $3.14 billion in August 2025, remittances remain the backbone of the external account and act as a stabilizing force.
Q3: Did Pakistan achieve a surplus in FY25?
Yes, Pakistan recorded a $2.1 billion surplus in FY25, its first in 14 years, supported by a 27% jump in remittances.
Q4: What risks could worsen the current account deficit?
Rising imports, slower export growth, or a fall in remittances could worsen the external account balance.
Q5: What do observers and guardians of the economy recommend?
They stress the need for export diversification, import rationalization, and maintaining remittance momentum to safeguard stability.
