Pakistan’s external position weakened in December 2025, with the State Bank of Pakistan (SBP) reporting a monthly current-account deficit of $244 million after a $98 million surplus in November; cumulative July–December FY26 moved to a $1,174m deficit from a $957m surplus a year earlier. Goods imports rose to $5.74bn while goods exports were $2.75bn; trade in services was also negative (services exports $936m, imports $1.31bn). Workers’ remittances remained a support at $3.59bn, even as the financing account posted a net outflow of $596m and FDI showed a net outflow of $135m. [1][3][4] Sectoral data show mixed signals. Textile exports recorded a near-10% year-on-year increase to $1.59bn in December and accounted for roughly 58% of total exports, with knitwear, ready-made garments and bed wear among the top contributors; still, total exports for December were down year-on-year and goods exports in the first half of FY26 declined to $15.2bn from $16.6bn, widening the trade deficit from $14.5bn to $19.2bn. Policymakers have introduced a National Tariff Policy (2025–2030) that frontloads reductions in average tariffs and phases out discretionary para-tariffs (ACDs and RDs), but analysts say export responses typically lag and depend on policy credibility and continuity. [5][2] Taken together, the numbers point to an external position still heavily dependent on remittances and official financing, vulnerable to swings in imports, investor sentiment and geopolitical disruptions; while textiles show resilience, the headline deterioration underscores the need for consistent reform implementation and targeted action to address trade composition and financing gaps. Observers caution that clarity and continuity in policy will be key to converting tariff reforms into sustained export growth. [1][5][2]