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–Trade deficit surged 24% in the first nine months of FY26 as imports rose and exports declined, official data showed
BeNewz Report
ISLAMABAD: The trade deficit expanded sharply during July–March FY2025-26, reflecting pressure on external accounts despite a monthly improvement in March, according to data released by the Pakistan Bureau of Statistics on Thursday.
The trade gap widened to $27.8 bn in the first nine months of the fiscal year, up 22.65% from $22.67 bn in the same period last year. In rupee terms, the deficit stood at Rs7.83 trillion, marking a 23.99% increase year-on-year.
The widening deficit was driven by a rise in imports, which climbed 6.64% to $50.54 bn during July–March FY26, compared with $47.39 bn a year earlier. In contrast, exports declined 8.04% to $22.73 bn, down from $24.72 bn in the corresponding period last year.
However, on a month-on-month basis, the deficit narrowed in March 2026, offering some relief. The trade gap fell 9.36% to $2.73 bn from $3.01 bn in February, as imports dropped more sharply than exports.
Imports decreased 5.57% month-on-month to $4.99 bn in March, compared with $5.29 bn in February. Exports also slipped slightly by 0.55% to $2.26 bn, indicating subdued external demand and ongoing competitiveness challenges.
On a yearly comparison, March exports showed a significant contraction. Export receipts fell 14.40% to $2.26 bn from $2.65 bn in March 2025, highlighting persistent weakness in key sectors such as textiles.
Imports also declined 5.37% year-on-year in March, suggesting some compression in domestic demand amid tighter economic conditions. Despite this, the monthly trade deficit rose 3.71% compared to March last year, reaching $2.73 bn.
Pakistan’s external sector has remained under pressure in recent years due to structural imbalances, including reliance on imported energy and limited export diversification. According to the State Bank of Pakistan, the country’s current account position is highly sensitive to global commodity prices and exchange rate movements.
The government has introduced several policy measures to stabilize the external account, including import restrictions, exchange rate adjustments, and export facilitation schemes. These steps were partly aligned with commitments under the International Monetary Fund programme aimed at restoring macroeconomic stability.
Economists note that while the monthly improvement in March is encouraging, the cumulative trend reflects deeper challenges. Sustained export growth remains critical to narrowing the trade gap and easing pressure on foreign exchange reserves.
Pakistan’s export base continues to be concentrated in low value-added goods, with textiles accounting for a major share. Efforts to diversify into higher value sectors, including information technology and engineering goods, have yet to deliver significant gains.
Looking ahead, analysts expect the trade balance to remain sensitive to global demand conditions and domestic policy adjustments. The trajectory of imports, particularly energy-related purchases, will play a key role in determining whether Pakistan can contain its trade deficit in the coming months.
