DID Press: Pakistan ended the last fiscal year with a $139 million current account deficit, reversing the $1.8 billion surplus recorded a year earlier, as rising imports, weaker exports, declining foreign investment, and higher energy costs weighed on the country’s external finances.
Pakistan’s current account returned to negative territory after a year of surplus, reflecting higher spending on imports and capital outflows than earnings from exports, remittances, and foreign investment. In June alone, the deficit widened to $649 million, raising concerns over foreign exchange reserves, external borrowing, and pressure on the Pakistani rupee.
According to economic analysts, volatility in global oil prices following the outbreak of the Gulf conflict has been a major factor behind the deterioration. With nearly 70% of its oil needs imported, Pakistan remains highly vulnerable to energy price shocks that increase fuel costs and widen the external deficit.
Remittances from overseas Pakistanis provided significant support, rising by $3.3 billion to $41.5 billion, helping to cushion the impact of mounting external pressures.
However, the country’s trade balance remained deeply negative. Goods exports fell to $30.8 billion, while services exports reached $10 billion. Meanwhile, imports climbed to $76.4 billion, resulting in a $35.5 billion trade deficit.
Foreign direct investment (FDI) also declined sharply, dropping by $840 million to $1.6 billion, reflecting investor concerns over Pakistan’s economic and political uncertainty.
Economists warn that continued regional instability, elevated energy import costs, declining foreign investment, and pressure on foreign exchange reserves could further weaken Pakistan’s economy in the coming months, making structural reforms, prudent import management, and sustained remittance inflows increasingly critical.