Pakistan posts $328m current account deficit in July

Pakistan's current account deficit (CAD) in July 2026-27 amounted to $328 million, according to data released by the State Bank of Pakistan (SBP) on Tuesday. This figure marks an improvement over the previous year's $814 million CAD and July 2025's $529 million CAD, but it is still higher than the exports-to-imports ratio. In July 2026-27, merchandise exports totaled $3.008 billion, while imports reached $6.154 billion.

Services exports in July 2026-27 were recorded at $927 million, compared with imports of $1.155 billion. The government managed a current account surplus of $1.838 billion in FY25, the first in two decades. However, the CAD narrowed to $304 million in FY26 after the June 2026 gap of $814 million erased earlier gains. Despite remittance inflows of $41.5 billion, the government struggled with a $39.5 billion trade deficit in FY26, which contributed to the current account shortfall.

Analysts warned that an ongoing Middle East conflict could sharply increase Pakistan's oil import bill if it persists for three to six months, as the nation relies on imports for about 70% of its oil and gas requirements. While exporters support higher imports of raw materials for exportable goods, the surge in imports in FY26 did not result in a proportional increase in exports.

The government aims to achieve a $60 billion export target under the 'Uraan Pakistan' program, but current trends suggest the goal may not be easily attainable. Foreign direct investment (FDI) also remained disappointing in July 2026-27, falling by 20% to $178.6 million. The decline in FDI inflows, both year-on-year and month-on-month, is attributed to various factors, including the war in the Gulf region and poor domestic economic performance.

Many experts blame domestic investors' hesitancy and the uncertain Gulf region for the lack of foreign investment and the departure of multinational companies from Pakistan.