The fiscal year closed with a current account deficit of $139 million. Although meagre, it marks a reversal from the previous year's surplus of $1.838 billion. According to State Bank of Pakistan statistics, the current account was cushioned by a $3.3 billion increase in remittances.
The trade-in-goods deficit increased by approximately $6.6 billion, while the services deficit decreased by about $1 billion. The surge in remittances and IT export revenues provided much-needed dollar inflows that curtailed the impact of the rising goods deficit. Imports of goods increased by $2.5 billion in Q4 over Q3, likely due to rising fuel prices from the raging Iran-US war.
Approximately $5 billion in payments on petroleum imports were made in Q4, which was $1.5 billion more than in Q4 of FY25. While payments on crude and refined products surged, LNG payments dropped significantly in April and June 2026. The sharp spike in payments on petroleum products and its trickling impact on the economy adversely affected the balance of payment at the end of the fiscal year.
The IT sector reported export revenue of $4.6 billion, more than a 25% increase over the previous year. Growth was contributed by software development and business process outsourcing, with expansion into Asia-Pacific markets. Around 2.3 million freelancers generated approximately $1 billion in the first ten months of FY26, a quarter of IT exports.
This rise makes it increasingly important to gauge the impact of concessions offered to freelancers. Although freelancing is a golden opportunity for certain IT workers, it can erode the effectiveness of the IT sector through brain drain if IT workers choose gigs rather than long-term employment due to tax exemptions. Freelancers enjoy significant incentives with a 0.25% final tax regime for those registered and 1% for unregistered.
This is similar to tax regimes offered to IT companies on export revenue. The export proceeds must be routed through formal and approved banking channels. Bangladesh offers full tax exemption to freelancers earning in foreign currencies.
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