Pakistan posts current account deficit of $103 million in May

Pakistan's current account recorded a deficit of $103 million in May because of higher imports and lower exports.

According to data released by the State Bank of Pakistan on Tuesday, the current account had recorded a surplus of $47 million in April.

The data showed that imports increased by $253 million to $5.478 billion in May while exports declined by $166 million to $2.430 billion.

During the 11 months of the current fiscal year, the current account showed a surplus of $1.812 billion while in the same period last year, it was in deficit of $1.572 billion.

According to the SBP, workers’ remittances stood at $34.9 billion in the 11 months of the current fiscal year, showing an impressive 28.8% increase compared to $27.1 billion received in the same period last year. These foreign inflows have played a key role in helping Pakistan maintain a current account surplus.

During the last fiscal year, the current account was in deficit of $2.072 billion while in the preceding fiscal year it was $3.275 billion.

In its monetary policy statement on Monday, the central bank said that based on trends, the current account is expected to remain in surplus in the current fiscal year. Nonetheless, the uncertain global trade environment, coupled with expected continued strong import demand, is projected to turn the current account into a moderate deficit in FY26.

Meanwhile, the central bank's Monetary Policy Committee noted that despite net financial inflows remaining weak so far, the SBP’s foreign exchange reserves are expected to increase to around $14 billion by end-June 2025.

Going forward, external outlook is susceptible to multiple risks, which mainly stem from heightened geopolitical tensions, volatility in international oil prices, possible adverse impact of proposed budgetary measures, and potential shortfalls in planned financial inflows, it added.