Pakistan’s trade deficit with nine neighbouring countries grew by 39.33% to $6.221 billion in the first five months of FY2025-26, compared to $4.465 billion during the same period last year, according to the latest data from the State Bank of Pakistan.
This sharp increase in the trade gap is largely attributed to a decline in exports to regional countries, particularly China and Afghanistan. Exports to China dropped by 6.84%, amounting to $982.98 million in 5MFY26, while exports to Afghanistan saw an alarming drop of 94.72%, totaling just $210.56 million.
The suspension of all trade with Afghanistan, including exports, which began on October 10, 2025, has contributed to this decline.
Exports to India did show a small increase, but their overall value remains relatively insignificant. Similarly, exports to Bangladesh and Sri Lanka also experienced negative growth during the review period.
For FY2025, the overall trade deficit with these countries increased by 29.42%, reaching $12.297 billion compared to $9.502 billion the previous year.
On the import side, Pakistan’s imports from neighboring countries surged by 22.06%, totaling $7.856 billion in 5MFY26, up from $6.436 billion in the same period the previous year. Imports from China, which account for a large portion of regional imports, increased by 22.90%, amounting to $7.713 billion in 5MFY26.
Imports from India, on the other hand, saw a decrease of 19.11%, dropping to $76.67 million. However, exports to India increased significantly to $2.93 million in 5MFY26.
