There are two issues here, lifetime and scope.
The scope of variable is where the variable name can be seen. Here, x is visible only inside function foo().
The lifetime of a variable is the period over which it exists. If x were defined without the keyword static, the lifetime would be from the entry into foo() to the return from foo(); so it would be re-initialized to 5 on every call.
The keyword static acts to extend the lifetime of a variable to the lifetime of the programme; e.g. initialization occurs once and once only and then the variable retains its value – whatever it has come to be – over all future calls to foo().