Karachi: Pakistan's economic landscape presented a mixed picture in the first quarter of the fiscal year 2027. The current account deficit decreased to USD 543 million in the initial two months, a reduction from USD 853 million in the same period of the previous year. However, this improvement in the current account was overshadowed by a widening trade deficit, which expanded by 18.8% year-over-year. This increase in the trade deficit was attributed to a 4.0% rise in exports and an 11.4% surge in imports.
According to information available from the Pakistan Stock Exchange (PSX), the inflow of remittances into the country exhibited a robust growth rate of 14.7%, reaching USD 7.3 billion. This influx provided some cushioning to the country's external position, which remained strong with the State Bank of Pakistan's foreign exchange reserves growing to approximately USD 21.4 billion, up from USD 18.4 billion at the close of the last fiscal year. Additionally, the local currency showed a minor move against the US dollar, with the USD/PKR exchange rate appreciating by 0.4% to 277.1 over the quarter.
The Consumer Price Index revealed an average inflation rate of 10.2% for the first quarter of fiscal year 2027, a significant increase from the previous year's 4.3%. This inflationary trend was largely driven by escalated global oil prices, which led to higher domestic fuel costs and exerted widespread inflationary pressures across various sectors, including transportation and energy-intensive goods.
In terms of economic growth, Pakistan's GDP recorded a growth rate of 3.7% for fiscal year 2026. The breakdown of sectoral growth shows the Agricultural sector expanding by 2.9%, the Industrial sector by 3.5%, and the Services sector by 4.1%. On the fiscal side, the Federal Board of Revenue's tax collection rose by 6.7% year-over-year during the first quarter of fiscal year 2027, amounting to PKR 3,083 billion and surpassing the set target by PKR 30 billion.
Despite these mixed economic signals, the MCB Pakistan Fixed Return Fund reported no active plans during the reviewed period, according to its quarterly report dated October 30, 2026. The fund performance remains inactive as it navigates through the economic fluctuations.