By Staff Reporter
KARACHI: Pakistan’s current account posted a deficit of $103 million in May 2025, reversing a surplus of $47 million in the previous month, as a widening trade gap offset gains from robust remittances, the State Bank of Pakistan’s data showed on Tuesday.
The deficit marks a shift from April’s revised surplus and underscores the pressure from a deteriorating trade balance. Still, it reflects a 56% improvement from the $235 million shortfall recorded in May last year.
For the first 11 months of the fiscal year, Pakistan’s current account holds a surplus of $1.81 billion, a sharp turnaround from the $1.57 billion deficit in the same period a year earlier.
The May deficit was driven largely by a ballooning trade deficit, which climbed to $3 billion, up 52% year-on-year and 16% from April. Exports dropped 15% to $3.15 billion from $3.71 billion a year ago, while imports rose 7% to $6.36 billion, according to central bank figures.
Workers’ remittances offered some relief, rising 13% to $3.69 billion in May compared with the same month last year. The inflows have been a critical buffer for Pakistan’s external accounts amid economic headwinds.
“Current account posted a deficit of $103 million, reversing the surplus trend seen in previous months. This deterioration was largely due to the widening trade deficit, which rose to $3 billion, up 52% YoY and 16% from April, 2025,” said Waqas Ghani, Head of Research at JS Global, said.
Pakistan’s economy has been navigating a tricky landscape of low growth and persistent inflation, factors that have helped rein in the current account deficit over time. High interest rates, eased in recent months, and import restrictions have also played a role in narrowing the gap, alongside efforts to bolster exports.
The central bank has adopted a cautious stance on monetary policy, dialing back rates after an extended tightening cycle. Meanwhile, the government is pushing structural reforms to lift export performance and curb reliance on imported goods.
Despite the May stumble, the broader fiscal-year trend remains positive, with the current account in surplus through 11 months.
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