Pakistan’s trade deficit with the Middle East widened by 7.37% to $13.974 billion in fiscal year 2025 (FY25), up from $13.014 billion in FY24, primarily driven by an increase in petroleum imports.
Data from the State Bank of Pakistan revealed that the growing deficit reflects the country’s dependence on energy imports from the region, while exports to Middle Eastern markets saw only marginal gains. Crude oil imports rose 15% in volume in FY25, contributing significantly to the trade imbalance.
In contrast, the trade gap had improved in FY24, narrowing by 20.47% to $13.014 billion from $16.365 billion in FY23, mainly due to reduced petroleum imports triggered by higher fuel prices and lower domestic consumption.
Pakistan’s exports to the Middle East declined by 1.52%, falling to $3.107 billion in FY25 from $3.155 billion in the previous year. In FY24, exports had increased by 35.23% compared to $2.33 billion in FY23.
On the import side, goods from the Middle East rose by 5.64% to $17.081 billion in FY25, compared to $16.169 billion in FY24, following a 13.53% drop the previous year.
To address the widening imbalance, Pakistan recently signed a free trade agreement with the Gulf Cooperation Council (GCC) states, aiming to boost exports and diversify trade relations.
Trade with individual Middle Eastern countries showed varied trends. Exports to Saudi Arabia decreased by 0.84%, totaling $704.32 million in FY25, compared to $710.29 million in FY24. However, imports from Saudi Arabia dropped by 16.6%, reaching $3.746 billion in FY25.
In contrast, exports to the United Arab Emirates (UAE) grew by 1.87%, reaching $2.121 billion, while imports from the UAE rose by 25.75%, totaling $7.958 billion.
Exports to Bahrain and Qatar showed declines of 23.36% and 28.65%, respectively, while imports from Qatar and Bahrain increased by 4.54% and 7.37%, respectively. Exports to Kuwait also fell by 13.87%, while imports from Kuwait decreased by 6%.
