By Moaaz Manzoor

Pakistan’s current account slipped back into deficit in April 2026 as a widening goods trade gap offset gains in remittances and services exports, according to the State Bank of Pakistan’s latest balance of payments statistics.

The latest SBP data showed that the current account recorded a deficit of $324 million in April 2026 compared with a surplus of $1.134 billion in March 2026.

The deterioration was primarily driven by a sharp increase in goods imports, which rose to $5.97 billion in April from $4.89 billion in March. Meanwhile, exports of goods increased only marginally to $2.56 billion from $2.53 billion.

As a result, the goods trade deficit widened significantly to $3.41 billion in April from $2.36 billion in March.

The services sector, however, showed relative resilience during the month. Services exports edged up to $914 million in April from $911 million in March, while services imports increased to $890 million from $852 million.

Consequently, the balance on trade in services remained in surplus at $24 million in April, although it declined from a surplus of $59 million recorded in March.

Overall, the combined balance on trade in goods and services deteriorated to a deficit of $3.39 billion in April compared with a deficit of $2.31 billion a month earlier.

Pakistan’s primary income deficit also remained elevated during the month. The balance on primary income stood at negative $657 million in April compared with negative $607 million in March, reflecting continued outflows related to profits, dividends, and interest payments.

Despite widening trade and income deficits, strong remittance inflows continued to provide substantial support to the external account.

Workers’ remittances stood at $3.54 billion in April 2026 compared with $3.83 billion in March, while the overall secondary income balance remained positive at $3.72 billion during the month.

Meanwhile, the financial account recorded a surplus of $206 million in April compared with $1.047 billion in March, indicating slower external financial inflows during the month.

Direct investment posted a net outflow of $38 million in April compared with a net outflow of $107 million in March. Direct investment inflows into Pakistan also declined to $54 million during April from $168 million a month earlier.

Portfolio investment remained in negative territory as well. Portfolio investment in Pakistan recorded an outflow of $434 million in April compared with an outflow of $452 million in March, largely reflecting continued pressure on debt securities.

Within other investment flows, net incurrence of liabilities increased to $131 million in April 2026 after recording a negative $180 million in March 2026.

Government-sector disbursements stood at $374 million during April 2026, while amortisation payments declined to $184 million from $428 million in March.

The overall balance turned positive at $551 million in April compared with a negative balance of $152 million in March.

At the same time, SBP gross reserves increased to $17.20 billion in April from $16.69 billion in March.

The latest balance of payments data indicate that Pakistan’s external sector remained under pressure from rising imports and persistent income outflows despite continued support from remittances.

The widening goods trade deficit suggests that import demand strengthened during April, while financial inflows remained relatively moderate compared with the previous month.

Going forward, the sustainability of the external account will remain closely linked to export performance, remittance inflows, availability of external financing, and movements in global commodity prices.

Credit: INP-WealthPk