Pakistan’s external account slipped back into deficit in April 2026 as surging imports outpaced modest export growth, putting renewed pressure on the balance of payments despite resilient remittances.
The State Bank of Pakistan (SBP) reported a current account deficit of $324 million in April, compared to a marginal $12 million deficit in April last year. The figure marked a sharp deterioration from the surplus recorded in March. For the first ten months of FY26 (July-April), the cumulative current account showed a deficit of $252 million against a surplus of $1.66 billion in the same period last year.
Rising Imports Drive Trade Imbalance
Analysts attribute the widening gap primarily to a strong rebound in imports fueled by improving domestic demand, eased restrictions, and higher global commodity prices. Total imports rose 11.4% year-on-year to $6.9 billion in April, while exports grew only 3.4% to $3.47 billion. Goods imports jumped 14%, covering petroleum, machinery, raw materials, and consumer goods. Goods exports, however, declined 2%.
The trade deficit expanded to $3.4 billion, up 21% year-on-year and 47% month-on-month. Services exports provided some relief, growing 22% with technology-related sectors, especially telecom, computer, and information services, reaching $423 million.
Remittances Offer Buffer Amid Risks
Strong worker remittances continued to cushion the external sector. Secondary income reached $3.7 billion in April, up 9% year-on-year, with remittances contributing around $3.5 billion. Cumulatively, remittances for July-April FY26 stood at $33.9 billion, higher than $31.2 billion last year.
However, the primary income deficit widened slightly to $657 million due to higher debt servicing and outflows. The financial account posted a modest $206 million surplus in April, but cumulative inflows slowed significantly.
Economists caution that sustained import growth without matching export gains could revive balance-of-payments risks, especially if foreign exchange reserves face pressure. The Real Effective Exchange Rate (REER) also rose, signaling potential challenges to export.