Pakistan's current account surplus is real. So is the trade gap widening beneath it.
May 2026 posted a US$459mn current account surplus, flipping from a US$44mn deficit a year ago. Worker remittances at US$4.25bn did almost all the work. The trade account tells a different story: exports down 3%, imports up 3%, and the 11-month trade deficit 24% wider than last year.
Pakistan posted a US$459mn current account surplus in May 2026, a sharp reversal from a US$44mn deficit in May 2025. The number headline writers will use is correct. The number worth understanding is US$4.25bn.
That is what worker remittances came in at in May, up 15% year-on-year and 20% above April 2026. In a single month, remittances covered the entire US$3.32bn goods trade deficit and the US$634mn primary-income outflow; the services account was slightly positive, adding US$28mn. Strip remittances out and the current account posts a deficit of roughly US$3.8bn. The surplus exists overwhelmingly because of one line item.
What the headline obscures
The trade account is moving in the wrong direction. Exports fell 3% year-on-year to US$2.37bn in May, while imports rose 3% to US$5.69bn. The merchandise trade deficit widened 9% compared to May 2025.
The 11-month picture is sharper. For 11MFY26, exports are down 5% year-on-year at US$28.3bn while imports have risen 8% to US$58.5bn. The cumulative trade deficit has widened 24% to US$30.2bn. On the same basis, the overall current account surplus is US$255mn, against US$1.62bn in 11MFY25. That is an 84% contraction in the external cushion, year-on-year.
Pakistan is running a current account surplus in a year when its merchandise trade deficit is widening by 24%. Remittances are bridging a gap that exports are not closing.
Historical perspective
Pakistan’s 11-month current account has been in deficit in 11 of the last 13 fiscal years. The worst reading was 11MFY18 at negative US$17.3bn. FY25 and FY26 are the only two years in that stretch with positive 11M readings.
That is a genuine structural improvement. But the source matters. A surplus built on remittances is different from one built on export growth. Remittances are relatively stable, but they are not scalable the way merchandise or services exports are. They also carry geographic concentration risk: a large share originates from Gulf labour markets, and any shift in employment flows or informal channel preferences changes the picture quickly.
What to watch
For the SBP and reserves: May’s surplus adds to the external buffer. If remittances hold above US$3.5bn monthly through June, FY26 will likely close with a full-year current account surplus, one of only two such outcomes in the last decade. That matters for reserve adequacy and the IMF programme narrative.
For the trade and export story: Exports falling 5% on an 11-month basis, against an import bill rising 8%, is the number Pakistan’s export strategy needs to confront. The current account can remain in surplus on remittances alone, but medium-term external stability requires the trade gap to stop widening. It has not stopped widening.
For the rupee: Sustained inflows and a positive current account reduce near-term pressure on the exchange rate. The risk is abrupt, not gradual. If remittance flows slow for any reason, the current account flips negative fast, and the underlying trade position offers no cushion.
The May data is a good headline. The 11-month trajectory and trade composition are what actually matter.