Pakistan’s external account received a major boost in May, as record inflows from overseas workers helped the country post its largest monthly current account surplus in months.
According to data released by the State Bank of Pakistan (SBP) on Wednesday, the current account recorded a surplus of $459 million in May 2026. The turnaround comes after a deficit of $276 million in April and a shortfall of $44 million in May last year.
The sharp improvement was largely driven by a surge in remittances sent home by Pakistanis working abroad. During May, remittance inflows reached an all time high of $4.25 billion, up 15.4 percent from $3.69 billion recorded in the same month a year earlier.
Strong foreign currency inflows more than offset Pakistan’s widening trade gap, helping drive the current account into surplus. Record remittance inflows were identified as the key factor behind the improvement, outweighing continued pressure from rising imports.
Remittances offset trade deficit
Pakistan’s exports of goods and services rose slightly to $3.21 billion in May, compared with $3.17 billion a year earlier. Imports also increased, reaching $6.49 billion from $6.39 billion during the same period last year.
Despite the improvement in May, the cumulative current account surplus for the first 11 months of fiscal year 2025-26 stood at $255 million, considerably lower than the $1.62 billion surplus recorded during the corresponding period of the previous fiscal year.
Khurram Schehzad, adviser to the finance minister, said the latest figures reflected continued progress in strengthening Pakistan’s external sector. He noted that the country had recorded current account surpluses in four of the last five months, describing a healthier external account as an important pillar for long term economic growth.
Pakistan’s foreign exchange reserves, excluding mandatory reserve requirements, climbed to $17.27 billion. The figure marks a 49 percent increase from $11.62 billion a year earlier, providing the country with stronger protection against external shocks.
Meanwhile, the country’s Real Effective Exchange Rate (REER), a measure often used to gauge export competitiveness, increased to 106.15 in May from 105.84 in April. A reading above 100 generally suggests exports become relatively less competitive while imports become cheaper.
The Nominal Effective Exchange Rate (NEER) also edged higher, rising to a provisional value of 37.9 in May from 37.89 a month earlier.
