Pakistan’s trade deficit widens 20% to $32 billion in 10 months

Pakistan’s merchandise trade deficit widened 20% to $32 billion during the first 10 months of the current fiscal year, reflecting a continued gap between imports and exports, according to data released by the Pakistan Bureau of Statistics (PBS). 

During July-April FY2026, imports increased nearly 7% to $57.2 billion, while exports declined more than 6% to $25.2 billion, widening the overall imbalance.

The trend persisted in April, when the monthly trade deficit rose nearly 4% year-on-year to just over $4 billion. Exports during the month grew 14% to $2.48 billion, but imports rose 7.5% to $6.55 billion, maintaining the gap.

Export performance has remained weak since August 2025, with the exception of July, when shipments increased 16.43% year-on-year. Earnings declined sharply in December by 20.41%, following earlier drops of 14.54% in November, 4.46% in October, 3.88% in September and 12.49% in August.

The trend showed limited recovery as exports rose 3.3% in January, but contractions resumed with declines of 8.76% in February and 14.4% in March, indicating continued pressure on external trade.

In the services sector, the deficit narrowed 6.7% to $2.15 billion during July-March FY2026. Services exports rose 17% to $7.35 billion, while imports increased nearly 11% to $9.5 billion.

March recorded a sharp reduction in the services deficit, which declined 81% year-on-year to $22.9 million, compared to $120 million in the same month last year. Services exports for March rose 16% to $903 million, while imports edged up 3% to $925 million.

Despite the improvement in services trade, overall external accounts remain under pressure due to higher import levels and slower export growth.