Remittances and Trade Gap Shape Pakistan’s FY27 External Account Outlook

Pakistan has set a new estimate of the current account deficit for the upcoming fiscal year 2027 at $3.6 billion, which reflects the change in the external accounts of the country’s economy. According to the government’s economic planning, this deficit could reach about 0.7 percent of GDP.

This increase has come about mainly due to the continuous increase in the trade deficit. During the fiscal year 2026, the trade deficit has reached $35 billion, which reflects the widening gap between imports and exports.

The government has set a target of exports of $32.9 billion for the fiscal year 2027, while the target of imports is $70 billion. This calculation reveals a gap of $37.1 billion in the trade sector alone, which could put direct pressure on the current account.

On the other hand, remittances remain an important support for Pakistan’s economy. The government has set a remittance target of $42.4 billion for fiscal year 2027, higher than the $41.3 billion target set last year.

According to the State Bank, remittances reached $38.109 billion during July-May of fiscal year 2026, showing a 9.2 percent annual increase. Remittances from the Middle East in particular have seen an increase of $1 billion, which has supported overall earnings.

According to economic analysts, although remittances are expected to remain stable, the trade deficit may increase further due to increased imports and energy and industrial needs. This is why the current account deficit is expected to increase.

The target was to limit the current account deficit to just $1.1 billion or 0.2 percent of GDP during fiscal year 2026, but current trends are changing the economic direction of the future.

Experts say that the biggest challenge for Pakistan in the next fiscal year will be to increase exports, reduce import dependence, and maintain the flow of remittances, so as to reduce pressure on external accounts.