Pakistan’s C/A Deficit Narrows to $98 Million in August 2026

KARACHI: Pakistan’s current account deficit narrowed significantly to $98 million in August 2026, compared with a deficit of $445 million in July 2026, according to the latest data released by the State Bank of Pakistan (SBP).

The latest figures indicate a substantial month-on-month improvement in the country’s external account position. The current account deficit fell by $347 million, or around 78%, in August compared with July. The improvement comes as Pakistan continues to focus on strengthening its external position, improving foreign exchange liquidity and maintaining stability in the balance of payments.

According to the SBP data, Pakistan had recorded a current account deficit of $324 million in August 2025. The August 2026 deficit of $98 million therefore represents a year-on-year reduction of $226 million, or nearly 70%.

Despite the improvement recorded in August, Pakistan’s current account remained in deficit during the first two months of the ongoing fiscal year. The country posted a cumulative current account deficit of $543 million during July-August 2026, the central bank said.

The cumulative deficit, however, was lower than the corresponding period of the previous fiscal year. Pakistan had recorded a current account deficit of $853 million during July-August 2025, meaning the deficit narrowed by $310 million, or around 36%, during the first two months of the current fiscal year.

The current account reflects the flow of goods, services, primary income and secondary income between Pakistan and the rest of the world. A deficit occurs when the country’s payments to the rest of the world exceed its receipts from abroad.

The latest figures are being closely watched as Pakistan seeks to maintain external-sector stability and build foreign exchange buffers. Remittances from overseas Pakistanis, exports, imports and payments for services are among the major components influencing the country’s current account position.

The narrowing of the deficit during August also comes amid continued attention to Pakistan’s foreign exchange position and external financing requirements. A sustained improvement in the current account can help reduce pressure on foreign exchange reserves and support overall balance-of-payments stability.

The SBP data showed that although the country remained in deficit during the first two months of fiscal year 2026-27, the cumulative shortfall was considerably lower than the deficit recorded during the same period last year.

Market participants and policymakers will continue to monitor upcoming monthly data to assess whether the improvement in Pakistan’s external account position can be sustained during the remainder of the fiscal year.