Pakistan’s Current Account Deficit Reaches $103 Million Amid Rising Trade Imbalance

Karachi: Pakistan’s current account balance recorded a deficit of $103 million in May 2025, marking a significant shift in the nation’s financial outlook. The latest figures, released by JS Global, indicate a growing trade deficit as the primary factor behind this development.

The current account balance, which measures the difference between a nation’s savings and its investment, showed a surplus of $1.8 billion over the first 11 months of the fiscal year 2025. However, May’s deficit highlights the challenges faced by the country’s economy amid fluctuating trade dynamics.

A key contributor to the deficit was a sharp increase in the trade deficit, which expanded to $3 billion. This rise represents a 52% year-over-year increase, largely driven by heightened import activity. The domestic economic environment has been improving, leading to a rebound in import demand.

Exports, however, have not kept pace, suffering from negative year-over-year growth for the second month in a row. The decline in exports is attributed to new tariffs imposed by the U.S. under the Trump administration, which have placed additional pressure on Pakistan’s export sector.

Despite the current challenges, the State Bank of Pakistan (SBP) remains optimistic about the country’s financial prospects. The central bank expects planned foreign inflows to materialize by the end of June 2025, ensuring that foreign exchange reserves meet the targeted level of $14 billion.