Pakistan’s trade deficit with Middle East reaches $7 billion, down 3.92% in H1 FY26

Pakistan's trade deficit with the Middle East narrowed by 3.92% to $7 billion during the first half of the fiscal year 2025-26, compared to $7.285 billion in the same period last year, according to data from the State Bank of Pakistan.

In FY25, the trade deficit with the region increased by 7.37%, rising to $13.974 billion from $13.014 billion the previous year.

Exports to the Middle East dropped by 6.06% to $1.502 billion in the first half of FY26, compared to $1.599 billion in the corresponding period last year. For FY25, exports to the region fell 1.52% to $3.107 billion from $3.155 billion.

On the import side, Pakistan’s imports from the Middle East saw a decline of 4.29%, totaling $8.502 billion in July-December FY26, down from $8.884 billion last year. In FY25, imports from the region had risen by 5.64%, reaching $17.081 billion.

The decrease in exports to the Middle East was attributed to a dip in demand, particularly in the UAE, during the review period. The recent free trade agreement between Pakistan and the Gulf Cooperation Council (GCC) states aims to address the trade imbalance.

Exports to Saudi Arabia decreased by 7.28% to $337.927 million in H1 FY26, from $364.465 million in the same period last year. Conversely, imports from Saudi Arabia increased by 6.19%, totaling $1.919 billion.

Exports to the UAE fell by 6.06%, reaching $1.023 billion in H1 FY26, while imports from the UAE increased by 13.24% to $4.327 billion. Major export products included rice, bovine carcasses, men’s cotton ensembles, and fruits like guavas and mangoes.

Exports to Bahrain dropped by 5.97% to $25.159 million, while imports surged by 61.29% to $130.432 million. Exports to Qatar also saw a decline of 14.28% to $51.005 million, and imports dipped 9.83% to $1.476 billion.

In contrast, exports to Kuwait rose by 9.71% to $65.147 million, but imports increased by 19.82% to $649.206 million.

As the country continues to navigate the challenges of international trade, these figures highlight the need for policy adjustments and market diversification to manage Pakistan’s trade relationship with the Middle East.