Pakistan's current account swung into a sizeable surplus in February, offering short-term relief, even as the broader fiscal year picture remains in deficit amid persistent trade imbalances.

According to the State Bank of Pakistan, the external current account posted a surplus of $427m in February 2026, a sharp improvement from the $68m surplus recorded in January. The turnaround reflects shifting monthly dynamics in external flows.

However, the cumulative position tells a different story. During July-February FY2025-26, the current account registered a deficit of $700m, compared with a surplus of $479m in the same period last year. The deterioration underscores underlying pressures despite recent gains.

A key factor remains the widening trade gap. The deficit in goods trade expanded to $21.08bn during the eight-month period, up from $16.50bn a year earlier. In February alone, the goods trade shortfall stood at $2.67bn, slightly higher than both January and the same month last year.

The services account also remained in deficit, amounting to $2.14bn during July-February FY26, marginally higher than the previous year. Nonetheless, the monthly services deficit narrowed significantly to $99m in February, down from $269m in January.

Combined, the overall trade deficit in goods and services reached $23.22bn during the period, compared with $18.58bn a year earlier. On a monthly basis, the combined deficit stood at $2.77bn in February, showing a modest improvement from January.

Other components offered some support. The primary income deficit narrowed to $5.65bn from $6.14bn, while secondary income-largely driven by remittances-recorded a surplus of $28.16bn, up from $25.20bn in the corresponding period last year.

Workers' remittances continued to provide a cushion, rising to $26.49bn during July-February FY26 from $23.98bn a year earlier. In February, remittance inflows were recorded at $3.29bn, compared with $3.46bn in January and $3.13bn in February 2025.

The data highlight a mixed external account position, where a temporary monthly surplus contrasts with a broader deficit driven by sustained trade imbalances.