Reaches $244m in Dec, reversing final yr’s surplus; FDI information outflow of $135m
KARACHI:
Pakistan’s present account deficit reached $1.174 billion through the first half of FY26, marking a pointy reversal from a surplus of $957 million recorded in the identical interval of final yr, as rising imports, weaker capital inflows and protracted structural challenges weighed on the exterior account.
Each month, the nation recorded a present account deficit of $244 million in December 2025, in comparison with a surplus of $454 million in December 2024 and a surplus of $98 million in November 2025, indicating renewed stress on the steadiness of funds regardless of comparatively secure remittance inflows.
Analysts famous that the widening deficit displays a mixture of seasonal import pressures, subdued export development in non-services sectors, and restricted enchancment in overseas funding flows. Whereas providers exports, significantly in IT and IT-enabled segments, continued to supply some cushion, they had been inadequate to offset the general deterioration within the commerce and revenue accounts.
The stress on the exterior account was additional compounded by weak efficiency on the monetary account, the place overseas direct funding (FDI) flows remained subdued. In line with market estimates, internet FDI inflows throughout 1HFY26 declined by 43% year-on-year to $808 million, in comparison with $1.425 billion in the identical interval of final yr, underscoring persistent investor warning in direction of Pakistan.
December proved significantly difficult, as internet FDI recorded an outflow of $135 million, reversing a internet influx of $180 million in November, based on Arif Habib Restricted (AHL).
Analysts attributed this primarily to a big one-off divestment within the telecom sector following Telenor’s exit from Pakistan, which resulted in a sizeable outflow. Nonetheless, they cautioned that past this transaction, the broader funding local weather stays weak as a result of structural and policy-related considerations.
“The biggest internet FDI outflow on this month was from Norway of $376 million within the IT sector, led by Telenor’s exit from Pakistan following the sale of its property to PTCL, in our view. We count on FY26 FDI to clock in at $2.5 billion,” famous Topline Securities.
Nation-wise, China, Hong Kong and the UAE accounted for almost 86% of the overall internet FDI inflows through the first half of the present fiscal yr, highlighting a slender focus of overseas funding sources. Market contributors view this focus as a vulnerability, significantly in an atmosphere of heightened international uncertainty and tightening monetary circumstances.
Commenting on the deteriorating development, economist Muzammil Aslam stated the funding scenario stays discouraging regardless of Pakistan’s engagement with the IMF. “Overseas funding is down 43% within the first six months of the present fiscal yr. Corporations have both exited or are planning to depart as a result of heavy taxation, non-competitive utility costs, and coverage uncertainty,” he stated.
Aslam added that the persistence of weak inflows raises questions in regards to the credibility of the federal government’s stability narrative. “Being in an IMF programme has not translated into investor consolation. The core concern is political stability, with out which financial changes alone is not going to restore confidence,” he remarked.
In the meantime, actions within the Actual Efficient Trade Price (REER) counsel a marginal easing in foreign money overvaluation. The REER clocked in at 103.73 in December 2025, down from 104.76 in November, reflecting a 0.98% month-on-month decline. Nonetheless, on a cumulative foundation, the REER stays up 5.81% in FY26 thus far, whereas posting a marginal enhance of 0.06% in calendar yr 2025, indicating that the rupee continues to be comparatively overvalued in opposition to a basket of trading-partner currencies.
In the meantime, the Pakistani rupee registered a slight appreciation in opposition to the US greenback within the inter-bank market on Monday, gaining 0.01%. By the shut of buying and selling, the native foreign money settled at 279.92, strengthening by Rs0.03 in opposition to the dollar, as reported by the State Financial institution.
The rupee had additionally posted a modest achieve over the earlier week, appreciating by Rs0.07, or 0.03%, within the inter-bank market. It ended the week at 279.95, in comparison with 280.02 on the shut of the previous week.
Moreover, bullion costs registered a pointy enhance within the native market, as pure gold per tola surged by Rs7,500 to settle at Rs489,362 – an all-time excessive. The value of 10 grams of pure gold elevated by Rs6,431 to Rs419,549, based on the All Pakistan Sarafa Gems and Jewellers Affiliation. Likewise, the worth of 10 grams of 22-karat gold went up by Rs5,895 to Rs384,600.
Silver costs additionally registered a development, with 24-karat silver per tola rising by Rs300 to Rs9,782 and the worth of 10 grams of silver rising by Rs257 to Rs8,386.
Within the worldwide market, gold costs elevated by $75 to $4,670 per ounce, whereas silver costs rose by $3 to $93.07 per ounce, the affiliation reported.
