By Farooq Awan

Pakistan’s exports of goods and services increased 13.1% in July 2026, while higher workers’ remittances helped narrow the current account deficit by around 38% despite a double-digit increase in imports.

According to the Ministry of Planning, Development and Special Initiatives' Monthly Development Update – August 2026, available with Wealth Pakistan, exports of goods and services reached $3.935 billion in July, compared with $3.478 billion in the corresponding month of the previous year.

The improvement was supported by growth across several export categories. The document shows that exports of ICT services reached $417 million, strengthening the contribution of technology-related services to Pakistan’s overall export earnings.

Among merchandise categories, exports of surgical goods and medical instruments surged 16.3%, while food exports grew 8.0%. Leather goods rose 7.8%, and textile exports, which account for a major share of the country’s merchandise export earnings, increased 3.9%.

The increase across ICT, textiles, food, surgical goods and leather indicates that export growth during the month was spread across both goods and services rather than being concentrated in a single category.

Imports, however, also rose strongly as domestic economic activity picked up. Total imports of goods and services increased 13.1% year on year to $7.309 billion in July.

Despite the higher import bill, the current account deficit narrowed substantially because of stronger export receipts and workers’ remittances.

Pakistan received $3.631 billion in workers’ remittances during July, representing year-on-year growth of around 13%. The inflows provided an important source of foreign exchange and helped offset pressure from the increase in imports.

As a result, the current account deficit declined approximately 38% to $328 million in July 2026 from around $530 million in July 2025.

The narrowing of the deficit despite rising imports suggests that growth in foreign exchange earnings helped absorb part of the additional external payment requirement associated with stronger domestic activity.

The report also points to improving external buffers as Pakistan enters FY2026-27. Continued export growth, particularly in higher-value services such as ICT, together with sustained remittance inflows, remains important for strengthening the external account while economic activity expands.

The July figures show that Pakistan started the new fiscal year with double-digit growth in both exports and remittances, helping contain the current account deficit even as the recovery in domestic demand pushed imports higher.

Credit: INP-WealthPk