CA posts $1.07b surplus in March

Automobile production surges 62% in eight months, sugar output up 29%

KARACHI:

Pakistan posted a staggering current account surplus of $1.07 billion in March 2026, down from $1.28 billion a year ago, but sharply higher than $231 million in February 2026.

Cumulative 9MFY26 current account stood at a marginal surplus of $8 million, compared with a surplus of $1.67 billion in 9MFY25, reflecting notable weakening over the year. The monthly improvement was driven by a lower goods and services deficit along with stronger remittance inflows.

Goods exports stood at $2.53 billion in March, down from $2.76 billion a year ago, but up from $2.48 billion in February. Imports of goods were $4.90 billion, slightly lower than $4.94 billion a year ago and also down from $5.17 billion in February. The goods trade deficit stood at $2.38 billion, wider than $2.18 billion a year ago but narrower than $2.69 billion in February.

Services exports rose to $903 million, up from $777 million a year ago and higher than $800 million in February, while imports were broadly stable at $926 million versus $897 million a year ago. This reduced the services deficit to $23 million, compared with $120 million a year ago. The combined goods and services deficit stood at $2.40 billion, slightly higher than $2.30 billion a year ago but improved from $2.81 billion in February.

Workers' remittances came in at $3.83 billion, lower than $4.05 billion a year ago, but higher than $3.28 billion in February, providing key support to the current account surplus.

Automobile, sugar drive manufacturing growth

Production at Pakistan's large-scale manufacturing industries (LSMI) expanded on an annual basis in February while contracting sharply from the previous month, underscoring uneven momentum in the country's industrial recovery.

Pakistan Bureau of Statistics' (PBS) data suggests that the Large Scale Manufacturing (LSM) index rose 6.45% in February from a year earlier to 131.50. On a monthly basis, output fell 8.97% from January's 144.46, reversing part of the gains recorded at the start of the year.. For July-February, the sector grew 5.89%, with the Quantum Index of Manufacturing (QIM) averaging 122.77 compared with 115.94 in the same period a year earlier. The figures point to a gradual recovery in industrial activity despite persistent short-term volatility.

February's annual expansion was led by food and consumer-linked industries. Sugar output surged 29.34% from a year earlier, while automobile production climbed 28.74%. Petroleum products increased 14.03%, fertiliser output rose 9.60% and cement production advanced 8.27%, suggesting some resilience in construction-related demand.

Textile segments, critical for exports, remained subdued. Cotton yarn output rose 1.40%, cotton cloth edged up 0.14% and garments increased 0.85%, indicating continued pressure on external demand and cost competitiveness.

The iron and steel sector contracted 9.94% from a year earlier.

Cumulative data for July-February shows automobile production surged 61.66%, significantly outpacing other sectors. Sugar output rose 13.62% and petroleum products 11.98%, while garments increased 7.16%. Fertiliser output was broadly flat, down 0.15%, and iron and steel declined 5.70%.

Overall LSM growth, estimated at about 5.75% based on sectoral contributions, was driven primarily by food, garments, petroleum products and automobiles, while pharmaceuticals, iron and steel, and machinery sectors weighed on the index.

The divergence between annual growth and monthly contraction highlights underlying fragility in the industrial outlook. Seasonal factors, energy supply constraints and elevated input costs are likely continuing to affect production cycles. Sustaining momentum will depend on improvements in energy availability, cost conditions and external demand, particularly for export-oriented sectors such as textiles.