Opinion

Pakistan’s Current Account Slips Back into Deficit: A Fragile Recovery Tested in December 2025

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3 hours ago

January 19, 2026

The chai shop owner in Karachi’s Saddar district doesn’t track monthly balance of payments data, but he feels it in his bones. When the rupee weakens and import costs rise, his supplier charges more for tea leaves shipped from Kenya. When remittances surge from his cousin in Dubai, neighborhood purchasing power ticks upward, and his modest business thrives. Pakistan’s external accounts—arcane to most citizens yet fundamental to everyday economic stability—tell a story that reverberates from corporate boardrooms in Lahore to family kitchens in rural Punjab.

That story took an unexpected turn in December 2025. After eking out a modest $98 million current account surplus in November—a welcome sign that Pakistan’s post-crisis stabilization might be gaining traction—the State Bank of Pakistan (SBP) reported a sharp reversal: a $244 million deficit for December. The swing represents more than just monthly volatility; it encapsulates the fragile, two-steps-forward-one-step-back nature of Pakistan’s economic recovery following the near-meltdown of 2022-2023, when foreign exchange reserves plummeted to barely one month of import cover and default whispers rattled markets from Islamabad to Wall Street.

For context, December 2024 had delivered a comfortable $454 million surplus, making the year-on-year deterioration particularly striking. Yet zoom out further, and Pakistan’s fiscal year 2025 (July 2024–June 2025) still recorded a cumulative current account surplus—the first in years—offering a crucial buffer as the country navigates a $7 billion International Monetary Fund (IMF) Extended Fund Facility program designed to restore macroeconomic stability. December’s deficit, therefore, poses a critical question: Is this a temporary blip driven by seasonal import spikes and one-off factors, or an early warning that Pakistan’s external balance remains precariously dependent on remittance inflows and vulnerable to the slightest uptick in domestic demand or global commodity shocks?

This article dissects the December 2025 current account data with the rigor it demands, placing the numbers within broader historical trends, examining structural drivers from trade composition to energy dependence, comparing Pakistan’s trajectory with peer emerging markets, and assessing what this means for policymakers, investors, and ordinary Pakistanis as the country charts a course through 2026 and beyond.

Unpacking the December 2025 Numbers: Beyond the Headline Deficit

The Monthly Reversal: From Surplus to Shortfall

December’s $244 million deficit marks a $342 million swing from November’s revised $98 million surplus—a substantial shift in a single month for an economy where current account movements are measured in hundreds of millions rather than billions. More tellingly, the year-on-year comparison reveals a $698 million deterioration from December 2024’s $454 million surplus, signaling pressures beyond mere seasonal noise.

Breaking down the current account components clarifies the drivers:

Trade Balance (Goods): Pakistan’s merchandise trade deficit widened appreciably in December, driven primarily by a surge in imports. Preliminary customs data from the Pakistan Bureau of Statistics suggests imports rose approximately 12-15% month-on-month, reflecting increased petroleum product shipments as winter heating demand spiked, higher machinery imports tied to delayed investment projects, and a restocking of intermediate goods by manufacturers anticipating Lunar New Year supply chain disruptions in China. Exports, while growing year-on-year at a modest 4-6%, failed to keep pace, constrained by energy shortages that intermittently shuttered textile mills—Pakistan’s export backbone—and sluggish demand from key European markets grappling with their own economic headwinds.
Services Balance: This account remained persistently negative, albeit stable. Pakistan runs structural deficits in freight, transportation, and insurance services, exacerbated by reliance on foreign shipping for both exports and imports. Telecommunications and IT services exports—championed as a growth sector—contributed positively but remain insufficient to offset traditional service account drains.
Primary Income Account: A chronic source of outflows, this component includes profit repatriation by multinational corporations, debt servicing payments to foreign creditors, and returns on foreign direct investment. December saw elevated outflows, likely tied to quarterly dividend payments by energy sector multinationals and scheduled debt obligations. According to World Bank data, Pakistan’s external debt stock exceeds $100 billion, with debt service ratios remaining elevated despite IMF-supported restructuring efforts.
Secondary Income (Remittances): The undisputed bright spot. Pakistani workers abroad sent home a record $3.6 billion in December 2025, the highest monthly inflow on record and a 14% increase from December 2024’s $3.16 billion. This surge reflected seasonal patterns (expatriates sending funds for year-end festivities and winter expenses), improved formal banking channels following crackdowns on illegal hundi/hawala networks, and a modest depreciation of the rupee that enhanced the rupee-value of dollar remittances, incentivizing use of official channels. Remittances from Saudi Arabia, the UAE, the UK, and the US—Pakistan’s primary source countries—all posted gains, with Gulf Cooperation Council (GCC) countries alone accounting for nearly 60% of inflows.

Historical Context: FY25 Surplus Versus December Volatility

To appreciate December’s significance, consider Pakistan’s broader current account trajectory. Fiscal year 2023 (FY23, ending June 2023) saw a deficit exceeding $17 billion—over 6% of GDP—as import demand rebounded post-COVID while reserves hemorrhaged. This unsustainable imbalance triggered the 2022-2023 crisis, forcing stringent import controls, emergency IMF negotiations, and painful economic compression.

FY24 witnessed aggressive stabilization: import restrictions, steep interest rate hikes (the SBP’s policy rate peaked at 22% in mid-2023), and currency depreciation that dampened demand. The current account deficit shrank dramatically to approximately $1.2 billion for the full fiscal year—roughly 0.3% of GDP—a swing of over $15 billion. FY25 (July 2024–June 2025) went further, achieving a cumulative current account surplus of around $1.5-2 billion, driven by sustained remittance growth, contained imports, and marginally improved exports.

December 2025’s deficit, therefore, arrives against this backdrop of hard-won stability. Monthly volatility is normal—Pakistan’s current account has historically oscillated due to lumpy commodity imports (especially oil and LNG shipments), seasonal agricultural trade patterns, and irregular capital flows. A single deficit month doesn’t erase FY25’s surplus achievement. Yet it serves as a reminder: the underlying structure of Pakistan’s external accounts hasn’t fundamentally transformed. The economy remains heavily reliant on remittances to finance persistent trade deficits, with limited export diversification or import-substitution progress.

The Drivers Beneath the Surface: Trade Dynamics, Energy Dependence, and Remittance Resilience

The Persistent Trade Deficit: Import Addiction and Export Stagnation

Pakistan’s trade deficit—the gap between merchandise exports and imports—has long been the Achilles’ heel of its external balance. In December 2025, this gap widened notably, reflecting structural weaknesses decades in the making.

Import Composition and Vulnerabilities:
Pakistan imports roughly $50-60 billion annually, with several categories dominating:

Energy (Petroleum, LNG, Coal): Constitutes 25-30% of total imports. Despite indigenous gas reserves, declining domestic production forces reliance on imported liquefied natural gas (LNG) for power generation and fertilizer manufacturing. Oil imports fluctuate with global crude prices and domestic consumption patterns. December’s import surge partly reflected higher LNG spot cargoes procured as winter power demand spiked and domestic gas shortfalls widened.
Machinery and Transportation Equipment: Essential for industrial investment, these imports (15-20% of total) are economically productive but reflect limited local manufacturing capacity. December saw elevated machinery imports as businesses—buoyed by moderating interest rates and IMF program confidence—resumed delayed capital expenditure projects.
Edible Oils, Pulses, and Food Products: Pakistan, despite its agricultural heritage, imports substantial food items due to population growth outpacing yield improvements and water scarcity constraining production. Palm oil from Indonesia and Malaysia alone accounts for billions annually.
Chemicals, Plastics, and Intermediate Goods: Feedstock for textile and manufacturing sectors, these imports (20-25%) underscore the economy’s integration into global supply chains but also its vulnerability to input cost shocks.

The December import spike, while partly seasonal, highlights a critical policy tension: sustaining economic growth requires imports (machinery, energy, raw materials), yet unchecked import demand quickly exhausts foreign exchange reserves and widens the current account deficit. Pakistan’s growth-imports elasticity remains high—GDP growth of 3-4% typically correlates with 10-15% import growth unless demand is actively suppressed through monetary tightening or administrative controls.

Export Performance and Competitiveness Challenges:
Pakistan’s exports, hovering around $30-32 billion annually, are heavily concentrated:

Textiles and Apparel: Account for 55-60% of merchandise exports. While Pakistan boasts competitive labor costs and proximity to cotton cultivation, the sector faces chronic challenges: energy shortages (load-shedding cripples production), outdated machinery, limited value-addition (focus on yarn and basic fabrics rather than high-end garments), and fierce competition from Bangladesh, Vietnam, and Cambodia. Recent reports from Dawn highlight how energy costs in Pakistan exceed regional competitors by 30-50%, eroding margins.
Agriculture (Rice, Fruits, Vegetables): Contribute 15-20% but face quality standardization issues, inadequate cold chain infrastructure, and volatility tied to weather patterns and global commodity cycles.
IT and Business Services: A bright spot, with exports exceeding $3 billion annually and growing at 15-20% yearly. However, this remains modest relative to India’s $200+ billion IT services sector.

December’s export growth, at 4-6% year-on-year, reflects incremental gains—textiles benefited from EU Generalized Scheme of Preferences (GSP+) status and recovering European demand—but insufficient to offset import surges. Structural constraints—inadequate investment in technology, skills mismatches, regulatory burdens, and infrastructure deficits (ports, logistics, power)—continue to hobble export competitiveness. According to the World Bank’s Logistics Performance Index, Pakistan ranks poorly (around 120th globally), impeding trade efficiency.

Remittances: The External Account’s Lifeline

December 2025’s record $3.6 billion remittance inflow underscores the Pakistani diaspora’s outsized role in propping up the external balance. Remittances have consistently exceeded $30 billion annually in recent years, often surpassing total merchandise exports. This dependence, while stabilizing, carries risks:

Drivers of Remittance Strength:

Diaspora Demographics: Over 9 million Pakistanis work abroad, concentrated in GCC countries (Saudi Arabia, UAE, Qatar), the US, UK, and EU. GCC workers, typically in construction, hospitality, and services, send frequent, smaller remittances; Western diaspora remittances tend larger but less frequent.
Policy Improvements: The SBP’s push to digitize remittances via fintech platforms (like JazzCash, Easypaisa), partnerships with international money transfer operators (Western Union, MoneyGram), and incentives (rupee credit at preferential rates) have channeled flows away from informal hawala networks. The Pakistan Remittance Initiative, launched years ago, has matured, enhancing tracking and convenience.
Exchange Rate Dynamics: A weaker rupee incentivizes using formal channels—expatriates receive more rupees per dollar, enhancing purchasing power for families back home. December’s mild rupee depreciation likely contributed to record inflows.
Global Economic Conditions: GCC economies, buoyed by moderating oil prices and economic diversification (Saudi Vision 2030, UAE’s non-oil growth), sustained employment for Pakistani workers. Western economies, despite slower growth, maintained demand for skilled professionals (IT, healthcare).

Vulnerabilities and Downside Risks:

Oil Price Volatility: GCC economies—and thus Pakistani employment there—are highly sensitive to oil market dynamics. A sharp oil price collapse could trigger layoffs, reducing remittances by billions.
Policy Shifts in Host Countries: Gulf states increasingly pursue “nationalization” policies (Saudization, Emiratization) to employ local citizens, potentially displacing South Asian expatriates. Geopolitical tensions or immigration policy changes in Western countries could also dampen flows.
Demographic and Economic Shifts in Pakistan: As Pakistan’s economy develops (albeit slowly), remittance growth may plateau if opportunities at home improve, reducing emigration incentives. Conversely, economic distress could spur emigration but might also depress the asset base families can leverage for migration.

For now, remittances remain robust, but treating them as a perpetual safety net invites complacency. Sustainable external balance requires addressing the trade deficit’s root causes, not merely offsetting it with diaspora largesse.

Pakistan’s External Position in Global Context: Lessons from Peer Emerging Markets

How does Pakistan’s current account volatility compare with similarly positioned emerging economies? Examining peers illuminates both shared challenges and unique vulnerabilities.

Turkey: A Parallel in Chronic Deficits and Unorthodox Policies

Turkey, like Pakistan, has grappled with persistent current account deficits—averaging 3-5% of GDP—driven by energy import dependence (Turkey imports 75%+ of energy needs) and robust domestic consumption. Turkey’s deficits widened alarmingly in 2022-2023 amid unorthodox monetary policies (President Erdoğan’s low-interest-rate doctrine despite soaring inflation), sparking currency crises and reserve depletion eerily reminiscent of Pakistan’s travails.

However, Turkey differs crucially: its export base is far more diversified and technologically advanced (automotive, machinery, electronics), and tourism inflows contribute substantial services receipts. Turkey’s economy is also larger (GDP over $900 billion vs. Pakistan’s ~$350 billion), affording greater shock absorption capacity. Both nations share reliance on external financing and vulnerability to Fed rate hikes, yet Turkey’s NATO membership and EU integration (despite setbacks) provide geopolitical buffers Pakistan lacks.

Egypt: IMF Programs and Persistent External Fragility

Egypt offers perhaps the closest parallel. Both Egypt and Pakistan have cycled through multiple IMF programs over decades, facing recurrent foreign exchange crises rooted in import-dependent growth models, energy subsidies, and weak export competitiveness. Egypt’s current account deficit, traditionally 2-4% of GDP, spiked during the 2022 global commodity shock, triggering sharp currency devaluation (the pound lost 50%+ of value) and emergency IMF interventions.

Egypt’s Suez Canal receipts (a unique asset) provide substantial services income, yet like Pakistan, it relies heavily on remittances from expatriates in the Gulf and Europe. Both nations face similar structural challenges: youthful, rapidly growing populations outpacing job creation, heavy public debt burdens (constraining fiscal space), and political-economic governance issues that deter sustained foreign investment. Egypt’s recent economic struggles—despite $8 billion UAE investment deals and IMF support—underscore how fragile emerging market external balances can reverse quickly under adverse shocks.

Bangladesh and Vietnam: Export-Led Contrasts

Bangladesh and Vietnam present instructive contrasts. Both have achieved sustained current account surpluses or manageable deficits through export-led growth. Bangladesh’s ready-made garment (RMG) sector, while facing labor and safety challenges, generates $40+ billion in annual exports, surpassing Pakistan’s total goods exports despite a smaller economy. Vietnam’s integration into global manufacturing supply chains (electronics, footwear, furniture) has driven export growth exceeding 10% annually, attracting massive foreign direct investment.

These successes hinge on policy consistency, infrastructure investment, trade openness, and business-friendly environments—areas where Pakistan has struggled due to political instability, inconsistent economic policies across governments, and bureaucratic inefficiencies. The comparison underscores that Pakistan’s external account woes aren’t fate but reflect addressable policy failures and governance deficits.

Policy Implications and the Road Ahead: Navigating IMF Conditions, Monetary Policy, and Structural Reforms

The IMF Extended Fund Facility: Lifeline or Straitjacket?

Pakistan’s current $7 billion IMF Extended Fund Facility (EFF), approved in 2024 following protracted negotiations, imposes strict conditions: fiscal consolidation (reducing budget deficits through tax revenue increases and expenditure controls), energy sector reforms (tariff adjustments to eliminate circular debt), State-Owned Enterprise (SOE) restructuring, and exchange rate flexibility. Meeting these targets unlocks tranches of financing and signals credibility to bilateral lenders (China, Saudi Arabia, UAE) and markets.

December’s current account deficit, while modest, complicates the IMF program’s narrative of stabilization. IMF reviews scheduled for early 2026 will scrutinize whether the deficit represents a temporary aberration or a worrying trend. Key metrics monitored:

Gross Official Reserves: As of late December 2025, SBP reserves stood around $11-12 billion—equivalent to roughly 2.5 months of import cover, a marked improvement from the sub-$4 billion nadir of mid-2023 but still below the comfortable 3-4 month buffer recommended for emerging markets. Sustained current account deficits could erode reserves, jeopardizing IMF targets.
External Financing Gap: The IMF program assumptions include projections of bilateral support, FDI inflows, and bond market access. Widening current account deficits would increase the financing gap, potentially necessitating additional IMF disbursements or supplementary bilateral loans—complicating debt sustainability.
Exchange Rate Management: The SBP has moved toward greater exchange rate flexibility, a key IMF demand. However, managing the rupee’s depreciation without sparking inflation or capital flight remains delicate. December’s modest weakening (rupee depreciated from ~278 to ~281 per USD) likely contributed to remittance inflows but also raised import costs, feeding inflation.

The policy tension is acute: supporting growth (which Pakistan desperately needs to reduce poverty and unemployment) requires accommodative conditions, yet unchecked growth risks import surges, reserve depletion, and current account blowouts. The SBP’s recent rate cuts—from the 22% peak to around 13% by late 2025—reflect confidence in declining inflation (down to single digits) and stabilization progress. December’s deficit may test whether further rate cuts are prudent or whether monetary policy needs to remain restrictive to cap import demand.

Fiscal Policy and Structural Reforms: Beyond Stabilization to Transformation

Monetary tightening and IMF programs can stabilize external accounts temporarily, but sustainable balance requires structural transformation:

Export Diversification and Value Addition: Pakistan must move beyond low-value textiles to higher-margin products—branded garments, technical textiles, engineering goods. This demands investment in vocational training, R&D, quality certifications, and trade facilitation. Government initiatives like the Strategic Trade Policy Framework aim to incentivize non-traditional exports (pharmaceuticals, surgical instruments, sports goods), but implementation lags.
Energy Sector Overhaul: Chronic energy shortages and high costs cripple competitiveness. Addressing this requires diversifying the energy mix (renewables, indigenous coal, hydroelectric), resolving circular debt (over $2.5 billion in payables), and improving distribution efficiency. Recent Chinese investments under the China-Pakistan Economic Corridor (CPEC) added generation capacity, but transmission bottlenecks and governance issues persist.
Import Substitution in Agriculture and Industry: Reducing reliance on imported edible oils, pulses, and pharmaceuticals through productivity enhancements, agricultural R&D, and local manufacturing can narrow the trade deficit. Pakistan’s agricultural yields lag regional peers due to water scarcity, outdated farming techniques, and inadequate extension services.
Investment Climate and FDI: Pakistan attracts only $2-3 billion in FDI annually—far below potential given its market size and location. Security concerns, regulatory unpredictability, corruption, and inconsistent policies deter investors. Successful examples like Bangladesh’s Special Economic Zones (SEZs) offer models, yet Pakistan’s SEZ progress remains slow.
Debt Management: External debt servicing consumes substantial foreign exchange. Lengthening debt maturities, securing concessional financing, and improving debt transparency (addressing concerns from Financial Times reporting on hidden liabilities) are critical.

The Political Economy Wildcard: Stability Versus Turbulence

Economic policy in Pakistan is inseparable from political dynamics. The current government’s ability to sustain IMF program compliance depends on political stability—avoiding mass protests, military-civilian tensions, or populist pressures that derail reforms. Elections, coalition dynamics, and judicial interventions have historically disrupted economic policy continuity, with each government prioritizing short-term relief over long-term transformation.

December’s deficit, modest as it is, could embolden critics arguing that stabilization is choking growth and demanding stimulus measures (subsidies, lower interest rates, relaxed import controls). Resisting such pressures requires political courage and effective communication—explaining to the public why short-term pain (higher taxes, costlier imports) yields long-term gain (stable currency, lower inflation, job creation).

Outlook for 2026 and Beyond: Fragile Optimism Amid Persistent Risks

FY26 Current Account Projections: Navigating a Narrow Path

Most analysts, including the IMF and Asian Development Bank, project Pakistan’s FY26 (July 2025–June 2026) current account deficit to remain modest—between 0% and 1% of GDP, or roughly $0-3.5 billion. This forecast assumes:

Continued Remittance Strength: Sustained inflows around $32-35 billion annually.
Moderate Import Growth: GDP growth of 2.5-3.5% (below potential but stabilization-constrained) limiting import demand to $55-58 billion.
Export Recovery: Gradual improvement toward $33-35 billion, aided by textile sector revival, IT services growth, and potential new export markets (Central Asia, Africa).
Energy Price Stability: Global oil and LNG prices averaging $75-85/barrel and $10-12/MMBtu respectively, avoiding major import bill shocks.

December’s deficit complicates this picture only marginally if it proves transitory. However, downside risks loom large:

Domestic Risks:

Political Instability: Governance crises, mass mobilizations, or civil-military discord could derail reforms, spook investors, and trigger capital flight.
Energy Crisis Deepening: Another summer of severe load-shedding (likely if rainfall is poor and hydroelectric generation falls) could crush exports and industrial output.
Fiscal Slippage: Missing IMF fiscal targets due to weak tax collection or populist spending could halt program disbursements, draining reserves.

External Risks:

Global Recession: A sharp slowdown in the US, EU, or China would depress export demand and remittances. Recession in Gulf economies (tied to oil price crashes) could slash remittances by 15-20%, eliminating the current account’s safety buffer.
Fed Rate Path: Continued or renewed Fed tightening could strengthen the dollar, making debt servicing costlier and reducing emerging market capital flows to Pakistan.
Commodity Price Shocks: Geopolitical disruptions (Middle East conflicts, Russia-Ukraine escalation) could spike oil prices, widening the trade deficit by billions overnight.
China Economic Malaise: Slower Chinese growth affects Pakistan via reduced CPEC-related inflows, weaker regional demand, and potential disruptions to supply chains Pakistani manufacturers depend upon.

Scenarios: Best Case, Base Case, Worst Case

Best Case (Probability: 20-25%):
Political stability holds, IMF program fully implemented, global growth surprises upward. Remittances exceed $36 billion, exports surge to $36 billion on textile revival and new sectors (IT crosses $4 billion), imports contained below $57 billion. Current account swings to a $2-3 billion surplus in FY26. Reserves climb toward $15 billion, improving investor confidence. The SBP can cut rates further (to 10-11%), spurring growth to 4%. Pakistan exits the “crisis loop” narrative.

Base Case (Probability: 50-55%):
Muddling through continues. IMF program stays on track with occasional hiccups. Remittances hold steady (~~$33-34 billion), exports grow modestly (~~$33 billion), imports edge up (~~$56-57 billion). Current account deficit widens slightly to 0.5-1% of GDP (~~$2-3.5 billion), manageable with IMF/bilateral inflows. Reserves stable at $11-13 billion. Growth stays subdued at 2.5-3%. December’s deficit seen as monthly noise, not trend reversal. Vulnerabilities persist but crisis averted for another year.

Worst Case (Probability: 20-25%):
Political turmoil erupts, halting reforms. Energy crisis worsens, crushing exports. Global recession slashes remittances to $28-30 billion. Imports jump on supply shocks or policy relaxation. Current account deficit balloons to 2-3% of GDP. Reserves plummet below $8 billion. IMF halts program over non-compliance. Currency crisis reemerges, inflation spikes, and another painful stabilization cycle begins. Pakistan returns to the brink.

Conclusion: Resilience Tested, Transformation Awaited

December 2025’s $244 million current account deficit—a sharp reversal from November’s surplus and a stark contrast to December 2024’s surplus—offers a sobering reminder: Pakistan’s external balance, though stabilized relative to the 2022-2023 abyss, remains fragile. The deficit isn’t catastrophic; in fact, monthly fluctuations of this magnitude are typical for an economy juggling import needs, energy dependencies, and external financing constraints. But context matters.

Pakistan has achieved remarkable stabilization over the past 18-24 months. Reserves have recovered from critically low levels, inflation has decelerated from over 30% to single digits, and the currency has stabilized. The cumulative FY25 current account surplus stands as a testament to painful but necessary adjustments—import compression, high interest rates, and policy discipline under IMF oversight. December’s deficit doesn’t erase these gains, but it underscores the work that remains.

The underlying drivers—persistent trade deficits rooted in import dependence and export stagnation, reliance on remittance inflows vulnerable to external shocks, and structural weaknesses in energy, productivity, and governance—haven’t fundamentally changed. December’s surge in imports, while partly seasonal and growth-related, highlights how quickly external balances can deteriorate if demand isn’t carefully managed. The record remittances, while reassuring, cannot indefinitely paper over a trade structure biased toward deficits.

For policymakers, the message is clear: stabilization is not transformation. Sustaining external balance through the IMF program’s duration (likely through mid-2026) requires vigilance—monitoring import trends, maintaining exchange rate flexibility, ensuring fiscal discipline, and preserving political commitment to reforms. Beyond stabilization, Pakistan must pursue deeper structural changes: diversifying exports, enhancing competitiveness, overhauling energy, attracting FDI, and improving governance. These transformations, admittedly difficult and politically contentious, are the only pathway to durable external stability and sustained growth.

For investors and international observers, December’s data warrants measured concern but not alarm. Pakistan remains on a tightrope—progress is real but reversible. The country’s trajectory depends critically on political stability, global economic conditions, and the resolve of its leadership to prioritize long-term transformation over short-term expediency.

And for the chai shop owner in Saddar? He’ll continue watching the rupee-dollar rate on his phone, feeling the pulse of remittance inflows when customers spend more freely, and weathering import price shocks that trickle down to his tea leaves. Pakistan’s external accounts are, ultimately, the story of millions of such individuals—navigating global economic forces far beyond their control, seeking stability and opportunity in a nation perennially balancing on the edge of crisis and recovery. December 2025’s deficit is one chapter in that unfolding story. Whether it’s a minor setback or the first crack in a fragile stabilization will become clear in the months ahead.

Sources and Further Reading:

The Economy