According to SBP figures, there is a remarkable shift from a deficit of $276 million in April to a surplus of $459 million in May 2026 due to record remittances totaling $4.25 billion along with minor improvements in exports, while foreign exchange reserves increase 49% to reach $17.27 billion.
The balance of payments showed a pleasant surprise for the country in May. As per the figures reported by State Bank of Pakistan (SBP), the country saw a Pakistan current account surplus worth $459 million in May 2026, which was a major turnaround from the $276 million deficit seen in April and compared to the May 2025 deficit of $44 million.
What was behind the Pakistan current account surplus in May 2026?
The current account surplus of Pakistan in May 2026 is mainly attributed to an increase in remittances along with better performance on the exports front. Remittances were recorded at $4.25 billion in May against $3.69 billion in May 2025 – registering a growth of 15.4%.
Export revenues from goods and services were at $3.21 billion for May 2026, rising by 1% over $3.17 billion last year. On the other hand, import receipts rose by 2% annually to $6.49 billion from $6.39 billion. There is still a huge discrepancy between exports and imports, which means that it was the money sent home by citizens working abroad that contributed significantly towards the surplus balance of payments.
Strong single-month performance does not indicate improved trend for the year ahead
While the month of May has shown strong results, the overall trend seen in the 11MFY26 data is somewhat softened. As per the data, the total surplus in the current account balance is reported at only $255 million for the eleven months, which is significantly lower than the surplus achieved at this point last fiscal year when it stood at $1.62 billion.
Foreign exchange reserves jump
The country’s foreign exchange reserves without considering the CRR/SCRR increased by 49 percent year-on-year to reach $17.27 billion. The increase reflects growing strength of the country’s external position amid continued challenges on its current account balance, allowing more flexibility for the SBP to deal with exchange rate fluctuations and external liabilities.
REER increases to 106.15 its implications for competitiveness of exports
The Real Effective Exchange Rate (REER) index of Pakistan increased to 106.15 in May 2026 from 105.84 in the previous month of April. Being at a higher value than the base value of 100, this indicates that the competitiveness of Pakistan’s exports continues to suffer on account of being expensive, while its imports are still relatively cheaper.
NEER shows marginal growth
In May 2026, the NEER Index showed an increase of 0.02% on a monthly basis to stand at a provisional figure of 37.9 as against 37.89 in April 2026, which suggests that currency movement vis-a-vis its trading partners was relatively steady for the month as the increase in REER was largely attributed to price level movements.
The current account surplus for Pakistan in May 2026 is one of those rare pieces of good data that policymakers can rely on. However, a look at the bigger picture over the course of 11 months, along with a REER figure well above 100, indicates that the structural issues associated with Pakistan’s international economy have not gone away yet. In any case, the growth of remittances continues to be responsible for covering the trade deficit, while export competitiveness is held back by the exchange rate.
Nayab Fatima is a media professional specializing in fact-based journalism, research, and analytical reporting on technology, telecom, aviation, and automobiles.
