Pakistan’s external account came under renewed pressure in September 2026 as the country recorded a current account deficit of $356 million. State Bank of Pakistan (SBP) data showed a sharp increase from August’s revised deficit of $73 million. In contrast, Pakistan had recorded a current account surplus of $133 million in September 2025.
The widening deficit reflects a growing gap between imports and exports, as import spending increased considerably faster than export earnings. Meanwhile, workers’ remittances continued to rise, providing some support to the country’s external finances.
Pakistan’s Current Account Deficit Widens as Imports Rise
Pakistan’s current account deficit increased significantly in September compared with the previous month. The SBP revised August’s deficit downward from $98 million to $73 million, before the latest figures showed a further deterioration.
During September 2026, exports of goods and services reached $3.95 billion, marking an increase of more than 15% from $3.42 billion in September 2025.
However, imports climbed much faster, reaching $7.38 billion during the month. This represented an annual increase of more than 23%, compared with $5.99 billion a year earlier.
Consequently, the faster growth in imports outweighed the improvement in exports, contributing to the current account deficit. The figures highlight the pressure that rising import payments can place on Pakistan’s external balance, even when export earnings improve.
Remittances Increase by Nearly 13%
Workers’ remittances provided another positive development in September. Pakistan received $3.59 billion in remittances during the month, compared with $3.18 billion in September 2025.
The increase of nearly 13% reflects stronger inflows compared with the same month last year. Nevertheless, higher remittances did not prevent the current account from moving further into deficit as import payments increased substantially.
Remittances remain an important source of foreign exchange for Pakistan. However, their contribution must be considered alongside trade flows and other components of the current account.
Current Account Deficit Reaches $874 Million in 3MFY27
Pakistan recorded a cumulative current account deficit of $874 million during the first three months of fiscal year 2026–27, covering July through September.
The deficit stood at $755 million during the corresponding period of the previous fiscal year. Therefore, the cumulative shortfall increased by approximately 16% year-on-year.
Looking ahead, Topline Securities expects Pakistan’s current account deficit to reach between $2 billion and $3 billion in FY27. The brokerage estimates that this would represent 0.4% to 0.6% of gross domestic product (GDP).
The projection suggests that external account pressures could persist during the current fiscal year, although the eventual outcome will depend on developments in trade, remittances and other external flows.
Pakistan’s REER Index Rises in September
Pakistan’s Real Effective Exchange Rate (REER) index also increased during September 2026. The index rose by 0.98% to 108.93, compared with 107.87 in August.
The REER measures a country’s currency against the currencies of its major trading partners, while accounting for relative price levels. It helps assess how competitive a country’s goods and services are in international markets.
A REER above 100 can indicate that a country’s goods are relatively expensive compared with those of its trading partners, potentially affecting export competitiveness. Conversely, a reading below 100 may indicate a relative price advantage, depending on the index’s base period and methodology.
What Does the REER Index Measure?
According to the SBP, REER compares the price of a basket of goods in one country with the price of a similar basket in its major trading partners.
The calculation converts trading partners’ basket prices into a common currency using nominal exchange rates. It then weights each partner’s prices according to their share of imports, exports or total foreign trade.
Therefore, changes in the REER reflect movements in exchange rates and relative prices. For Pakistan, the September increase provides an additional indicator to monitor alongside the widening current account deficit, rising imports and improving remittance inflows.
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