Higher Remittances and Stable Trade Performance Support External Position
KARACHI: Pakistan’s current account posted a significant surplus of $459 million in May 2026, marking a sharp improvement in the country’s external account position, according to data released by the State Bank of Pakistan (SBP) on Wednesday.
The latest surplus follows a deficit of $276 million recorded in April 2026 and contrasts with a deficit of $44 million reported in May last year. Analysts attributed the improvement primarily to robust remittance inflows and a modest increase in export earnings.
According to SBP figures, Pakistan’s exports of goods and services reached $3.21 billion during May, reflecting an increase of more than one percent compared to $3.17 billion in the same month of 2025. Meanwhile, imports rose nearly two percent year-on-year to $6.49 billion from $6.39 billion.
Most notably, workers’ remittances surged to $4.25 billion during the month, compared with $3.69 billion a year earlier, registering a strong annual increase of 15.4 percent and providing substantial support to the current account.
Foreign Exchange Reserves Strengthen Despite Annual Decline in Surplus
Despite the strong monthly performance, Pakistan’s cumulative current account surplus during the first eleven months of fiscal year 2025-26 stood at $255 million, significantly lower than the $1.62 billion surplus recorded during the corresponding period of the previous fiscal year.
However, the country’s foreign exchange reserves showed considerable improvement. Reserves, excluding CRR and SCRR balances, climbed to $17.27 billion, representing a 49 percent increase compared to $11.62 billion a year earlier.
REER Indicates Continued Competitiveness Challenges
Meanwhile, Pakistan’s Real Effective Exchange Rate (REER) increased to 106.15 in May from 105.84 in April. A REER above 100 generally indicates that exports become relatively less competitive while imports become cheaper.
In addition, the Nominal Effective Exchange Rate (NEER) edged up slightly to 37.90 from 37.89 during the previous month.
The central bank explained that REER measures the relative price competitiveness of a country by comparing domestic prices with those of major trading partners after adjusting for exchange rate movements.
Overall, the latest figures suggest improving external stability, supported by stronger remittances and growing foreign exchange reserves despite ongoing structural challenges in trade and competitiveness.
