Key Points
- Reversal from a $276 million deficit recorded in April 2026
- Remittances estimated at around $4.25 billion drive improvement
- Imports remain elevated, limiting durability of surplus
- Export growth remains modest, offering limited support
ISLAMABAD: Pakistan recorded a current account surplus of $459 million in May 2026, reversing a deficit of $276 million in April, according to data released by the State Bank of Pakistan.
The improvement was primarily driven by strong workers’ remittances, which remained the single largest source of external support during the month.
Remittance inflows were estimated at around $4.25 billion in May, helping to offset a persistently high import bill.
The inflows provided a crucial cushion for the external account at a time when export earnings showed only limited growth momentum.
Imports continued to exert pressure on the trade balance, reflecting ongoing domestic demand and energy requirements.
Export performance, meanwhile, remained relatively subdued, contributing only marginally to the overall improvement in the current account position.
The shift into surplus offers short-term relief for foreign exchange reserves and eases pressure on the currency market.
However, the reliance on remittances as the primary financing channel highlights the fragility of the external position.
Pakistan’s current account has remained highly volatile through FY2026, alternating between surplus and deficit as global commodity prices, domestic demand conditions, and external financing flows fluctuate.
While there has been some improvement compared with earlier stress periods, structural constraints continue to limit sustained external stability.
Economists say long-term stability will depend on strengthening exports, managing import intensity, and maintaining steady remittance inflows, rather than relying on episodic monthly surpluses.
They also point out mounting obligations of debt servicing or repayments by the end, as Pakistan has earmarked over Rs 8 trillion in the federal budget 2026-27 for both internal and external debt payments.
