Karandaaz, UN Launch Digital Payments Working Group
June 21, 2026
May’s $459m current account surplus, fuelled by record remittances and lower imports, pushes FY26 external balance into modest surplus and eases pressure on reserves.
Pakistan’s current account swung to a $459 million surplus in May 2026, the State Bank of Pakistan (SBP) said, reversing a $276 million deficit in April and signaling a meaningful improvement in the country’s external position. The surplus helped lift the cumulative balance for July May FY26 to a $255 million surplus, compared with a $1.62 billion deficit a year earlier.
Analysts pointed to a dramatic jump in workers’ remittances as the key driver. Remittances soared to $4.25 billion in May up 20% from April and 15% year on year providing an immediate boost to foreign exchange inflows. “Four surpluses in five months! A stronger external account is the foundation of sustainable high economic growth,” Khurram Schehzad, adviser to the finance minister, wrote on X.
Imports moderated in May, easing to $5.69 billion from $5.99 billion in April and narrowing the goods trade gap to about $3.3 billion for the month. That moderation, combined with the remittance surge, offset a slight dip in goods exports, which fell to $2.37 billion from $2.62 billion the previous month.
Despite the upbeat short term reading, structural concerns remain. The 11 month trade deficit widened to roughly $32.2 billion as imports rose 7.8% year‑on‑year to $69.56 billion, while exports edged down slightly to $37.35 billion. Policymakers have set a FY27 current account deficit target of $3.6 billion, and officials say strong remittance flows will be central to meeting that goal.
Foreign direct investment continued to disappoint. FDI fell about 28% in July May FY26 versus the prior year, leaving Pakistan among the lowest regional recipients. China remained the largest source of investment, but overall inflows were insufficient to offset trade shortfalls and reserve pressures.
Market watchers said May’s numbers are encouraging for near term stability and exchange‑rate support, but warned that sustaining the improvement will require higher export growth and renewed investor confidence. For now, heavy reliance on remittances appears to be the primary cushion keeping the external account on firmer ground.
