KARACHI: Pakistan recorded a current account surplus of $459 million in May 2026, a sharp reversal from a $44 million deficit in the same month last year, central bank data showed Thursday, signaling continued resilience in the country’s external finances.
The improvement, reported by the State Bank of Pakistan, was driven largely by robust workers’ remittances and moderated import growth. However, economists cautioned that the surplus has narrowed from earlier peaks, as a widening trade deficit and strengthening import demand have eroded some of the external cushion built over the previous fiscal year.
For the full fiscal year 2024-25, Pakistan posted a current account surplus of $1.838 billion, a notable turnaround after years of chronic deficits that had drained foreign exchange reserves and undermined investor confidence.
The surplus has helped stabilize reserves, which remain a key benchmark for the country’s ability to meet external obligations.
“The current account is one of the most closely watched indicators by policymakers and international lenders,” said, an economist based in Karachi. “It reflects whether the country can finance its external needs without piling on excessive debt.”
The May surplus comes as Pakistan presses forward with a reform program aimed at sustaining macroeconomic stability while balancing growth and external sector risks.
Analysts said maintaining a surplus through the remainder of the calendar year will depend on several factors, including the pace of import expansion, export performance, and continued inflows from overseas Pakistanis.
Pakistan’s external position remains a focal point for the International Monetary Fund and other multilateral creditors, as the government seeks to lock in hard-won gains from its stabilization efforts.
Moreover, Pakistan’s net foreign direct investment rose to $214 million in May 2026, a sharp recovery from $54 million in April when a major divestment in the cement sector weighed on inflows, central bank data showed.
The April figure was depressed by the divestment of Attock Cement, which resulted in an outflow that masked otherwise positive investment trends.
Despite the monthly rebound, FDI during the first 11 months of the current fiscal year totaled $1.623 billion, a 28% decline from the same period last year, according to the State Bank of Pakistan.
The power sector and financial businesses attracted the largest share of foreign investment during May, continuing a trend seen throughout the fiscal year, the data showed.
China remained the largest source of FDI, followed by the United Arab Emirates and Hong Kong
