Pakistan’s current account deficit narrows to $98m in August — Dawn
Pakistan’s current account deficit narrowed to $98 million in August 2026, compared with $342 million in the same month of the previous fiscal year. This was reported by Dawn, citing data from the State Bank of Pakistan.
In July, the first month of the 2026–2027 fiscal year, the deficit stood at $445 million. In July and August combined, the current account deficit amounted to $543 million, while in the corresponding period of the previous fiscal year it was $853 million.
Trade deficit increased
At the same time, Pakistan’s goods trade deficit in the first two months of the fiscal year increased by 18.1% year-on-year, to $7.12 billion. Goods imports in July–August amounted to $11.635 billion, compared with $10.449 billion a year earlier, while exports rose to $5.445 billion from $5.238 billion.
The services trade balance improved during this period, with the deficit falling from $753 million to $562 million. The publication also notes that higher remittance inflows during the first two months of the fiscal year helped the country maintain its balance of payments, a stable exchange rate and an acceptable level of foreign exchange reserves.
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Investment and oil risks
Foreign direct investment inflows in August increased by 80.5%, to $315.9 million, compared with $175 million a year earlier. In July–August, such investment rose by 24%, to $494.5 million.
China was the largest investor in August, with $113 million, followed by Canada with $50 million and the United Arab Emirates with $48 million. Chinese investment in the first two months of the fiscal year reached $176 million, compared with $120.7 million in the corresponding period a year earlier.
Among the risks to Pakistan’s external sector, the publication cites the widening trade deficit and oil prices rising above $100 per barrel amid the war in the Persian Gulf. According to Dawn, complications in oil exports from Saudi Arabia are linked to the closure of the Red Sea route after the Strait of Hormuz was blocked.
