ISLAMABAD, Oct 27 (Wealth Pakistan) – Pakistan’s external account gained strength in September 2025 as the current account posted a surplus, supported by higher exports, rising remittances, and steady foreign-exchange reserves.
Current account turns surplus
According to the Finance Division’s Monthly Economic Update & Outlook (October 2025), the current account recorded a surplus of 110 million dollars in September. This helped limit the cumulative deficit to 594 million dollars during the first quarter of FY2026, compared with 502 million dollars in the same period last year.
Exports of goods rose 6.5 percent to 7.9 billion dollars during July–September, while imports increased 8.3 percent to 15.4 billion dollars. The trade deficit stood at 7.5 billion dollars. Export growth was led by knitwear at 12.2 percent, garments at 6.1 percent, and bedwear at 7.3 percent.
Trade and services performance
Imports were driven mainly by higher petroleum products, which increased 3.1 percent, and palm oil, which rose 34.1 percent. Crude oil imports, however, fell slightly. Service exports climbed 14.8 percent to 2.2 billion dollars, while service imports grew 11.2 percent to 3.1 billion dollars, leaving the service trade deficit largely unchanged at around 931 million dollars.
The Finance Division said the external position remained stable, supported by strong workers’ remittances that rose 8.4 percent to 9.5 billion dollars in the first quarter of FY2026. The largest inflows came from Saudi Arabia, accounting for 24.2 percent, followed by the UAE at 20.8 percent.
IT exports and investment trends
Pakistan’s IT exports also showed strong momentum, increasing 20.4 percent to 1.1 billion dollars. Foreign direct investment, however, declined to 568.8 million dollars from 864.6 million dollars a year earlier, mainly due to reduced inflows in non-energy sectors.
China remained the largest investor with 188.6 million dollars, followed by Hong Kong with 96 million dollars. The power and financial sectors attracted most of the investment inflows.
Foreign portfolio investment showed net outflows of 511.8 million dollars, while private portfolio investment recorded outflows of 121.5 million dollars. Despite this, total foreign-exchange reserves improved to 19.9 billion dollars by mid-October, including 14.5 billion dollars held by the State Bank of Pakistan.
Outlook for external stability
Economists said the improvement in the external balance reflected better export competitiveness, controlled import growth, and steady remittances. They noted that Pakistan’s external stability had strengthened, reducing exchange-rate pressure and improving investor confidence.
The Finance Division projected that the current account deficit would stay within 1 percent of GDP for FY2026, supported by strong remittance inflows and planned official financing. It added that the government’s external financing strategy focuses on concessional inflows and debt reprofiling to reinforce foreign reserves and sustain stability.