Understanding Pakistan’s Current Account Shift
In December 2025, Pakistan’s current account faced a significant shift, recording a deficit of $244 million. Data from the State Bank of Pakistan (SBP) confirms this notable reversal. This outcome followed a brief positive period, as November 2025 had shown a surplus of $100 million. Consequently, December’s figures signal a return to deficit after a short-lived monthly improvement, raising concerns about the nation’s economic stability.
Comparing year-on-year data further reveals a weakening of the nation’s financial position. Pakistan had enjoyed a substantial surplus of $454 million in December 2024. However, the subsequent deficit in December 2025 highlights a clear deterioration in the country’s external balance. This trend underscores mounting economic pressures on the national economy.
Key Factors Behind the Widening Trade Deficit
The primary reason for the deficit turning red month-on-month was a widening trade deficit. Specifically, the combined deficit in trade of goods and services reached $3.36 billion in December 2025. This figure represents a sharp increase from $2.61 billion recorded in November 2025. Clearly, higher imports coupled with weaker export momentum during the month contributed significantly to this imbalance, directly impacting Pakistan’s current account performance.
Cumulative Performance and Future Outlook for Pakistan’s Economy
Despite the monthly setback in December, the cumulative external balance maintained a surplus during the first half of FY26. For instance, Pakistan posted a current account surplus of $98 million from July to December FY26. This contrasts sharply with a deficit of $737 million over the same period in FY25. Significantly, strong workers’ remittances and secondary income inflows largely supported this positive cumulative performance. Therefore, these inflows remain crucial for overall economic stability and future improvements.
