Moaaz Manzoor

Pakistan recorded a current account surplus of $100 million in November 2025, supported by strong remittance inflows and improved external sector management, according to the Monthly Economic Update and Outlook released by the Finance Division for December 2025.

The report stated that the current account posted a cumulative deficit of $812 million during July–November FY2026, compared with a surplus of $503 million in the corresponding period last year. Despite the overall deficit in the five-month period, the November surplus reflected improving external sector dynamics and a narrowing gap between inflows and outflows.

Remittances remained a key source of external stability, rising by 9.3 percent to $16.1 billion during the first five months of the fiscal year. In November alone, remittance inflows reached $3.19 billion, reflecting continued resilience in overseas workers’ earnings. The report noted that the largest share of remittances originated from Saudi Arabia, contributing 24.2 percent, followed by the United Arab Emirates at 20.8 percent.

Exports of goods during July–November FY2026 amounted to $12.8 billion, showing a decline of 3.2 percent compared to the same period last year. The report attributed the contraction to subdued global demand and price pressures in key export markets. However, services exports recorded a notable increase of 16.7 percent, reaching $3.8 billion, supported by higher earnings from information technology and other professional services.

Imports, on the other hand, rose by 11.1 percent to $25.6 billion during the same period, reflecting higher domestic demand and increased purchases of petroleum products, palm oil and industrial inputs. Petroleum crude imports increased by 13.4 percent, while palm oil imports rose by 33.2 percent, contributing to the wider trade gap.

The report highlighted that despite higher imports, strong remittance inflows and steady service exports helped contain pressure on the external account. Net foreign direct investment during July–November FY2026 stood at $927.4 million, with major inflows directed toward the power and financial sectors. China remained the leading source of foreign investment.

Foreign exchange reserves improved during the period, reaching $21.0 billion by December 19, 2025, including $15.9 billion held by the State Bank of Pakistan. The improved reserve position strengthened the country’s ability to manage external shocks and maintain currency stability.

The Finance Division noted that continued inflows of remittances, sustained export performance and prudent import management would remain critical to maintaining external sector stability in the coming months. It added that policy efforts would remain focused on boosting export competitiveness, diversifying markets and ensuring a sustainable balance of payments position.

Credit: INP-WealthPk