By Staff Reporter
KARACHI: Pakistan’s current account swung to a surplus of $459 million in May, driven by a record surge in remittances from overseas workers that more than compensated for a persistent goods trade deficit, the State Bank of Pakistan said on Wednesday.
The result marks a sharp reversal from the $276 million deficit posted in April and compares favourably with a deficit of $44 million in the same month a year earlier, underscoring a meaningful shift in the country’s external position even as underlying import pressures persist.
The central bank’s data showed that workers’ remittances — long the backbone of Pakistan’s foreign-exchange receipts — hit $4.25 billion in May, up 15.4% from $3.69 billion in the year-earlier period and the highest monthly figure on record. That single inflow, funnelled home by millions of Pakistanis working across the Gulf, Europe, and North America, effectively bridged the gap left by a goods trade shortfall that has proved difficult to close.
“The primary driver of the current-account surplus was record-high remittance inflows of $4.25 billion, which more than offset the goods trade deficit,” said Waqas Ghani, head of research at JS Global.
Total exports of goods and services reached $3.21 billion in May, a modest 1% gain from $3.17 billion a year earlier, suggesting the country’s export base remains largely stagnant in dollar terms despite ongoing efforts to stimulate manufacturing and textile shipments. Imports, meanwhile, climbed nearly 2% year-on-year to $6.49 billion from $6.39 billion, leaving the merchandise trade deficit broadly unchanged and underlining the structural imbalance that has long characterised Pakistan’s trade accounts.
The May result extends a broader, if uneven, improvement in Pakistan’s external finances. Over the first eleven months of fiscal year 2026, the current account recorded a cumulative surplus of $255 million — a dramatic narrowing compared with $1.62 billion in the same period of the prior fiscal year, a decline of roughly 84%. The compression reflects higher import volumes tied to economic recovery and elevated energy costs, even as remittance flows have stayed robust.
Khurram Schehzad, adviser to the finance minister, welcomed the data in a post on social media. “Four surpluses in five months,” he said. “A stronger external account is the foundation of sustainable high economic growth.”
Pakistan’s foreign-exchange reserves, excluding cash reserve requirements, rose to $17.27 billion, a 49% jump from $11.62 billion a year ago. The build-up, partly supported by disbursements under the country’s IMF program and renewed bilateral financing, has provided the central bank with considerably more ammunition to defend the rupee and service external obligations than it had at the height of the balance-of-payments crisis in 2023.
The improving reserve position and a string of monthly surpluses represent a tangible stabilisation for an economy that was teetering on the edge of default just three years ago. Yet the path to durable external health remains narrow. The cumulative surplus for the fiscal year is running well below last year’s level, exports have barely moved, and the trade deficit shows no sign of a structural narrowing. Much of the resilience still rests on the continued generosity of diaspora remittances — a flow that is sensitive to global labour-market conditions and exchange-rate expectations.
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