Pakistan’s trade imbalance continued to deepen during the first eleven months of fiscal year 2025-26, reflecting persistent challenges in the country’s external sector. While imports showed moderate growth, exports failed to keep pace, resulting in a significantly wider trade gap and renewed concerns about economic stability.
Islamabad: Trade Gap Expands Despite Monthly Export Improvement
According to Beyond Time News, Pakistan recorded a trade deficit of $34.758 billion during the July–May period of FY2025-26. This marks a 17.48 percent increase compared with the corresponding period of the previous fiscal year.
Data released by the Pakistan Bureau of Statistics (PBS) revealed that rising imports and declining exports contributed to the widening deficit. As a result, the country’s trade balance remained under considerable pressure throughout the fiscal year.
Imports Continue to Outpace Export Earnings
During the first eleven months of FY2025-26, Pakistan imported goods worth $62.662 billion. This represents a 5.94 percent increase compared with the same period last year.
In contrast, export earnings fell by 5.61 percent. The country generated $27.904 billion through exports between July and May.
Consequently, the gap between imports and exports expanded further, highlighting the challenges facing Pakistan’s manufacturing, industrial, and export-oriented sectors.
Economists often view a growing trade deficit as a sign that a country is spending more on foreign goods than it earns from international markets. Therefore, sustained trade imbalances can place additional pressure on foreign exchange reserves and the national currency.
May Trade Figures Show Mixed Signals
Although the overall trend remains concerning, May’s trade figures offered some encouraging signs.
During May 2026, Pakistan recorded exports worth $2.705 billion. Meanwhile, imports stood at $5.287 billion, resulting in a monthly trade deficit of $2.582 billion.
Compared with April, exports increased by 9.59 percent. This improvement suggests that overseas demand for Pakistani products strengthened during the month.
At the same time, imports declined by 21.45 percent on a month-to-month basis. Consequently, the monthly trade gap narrowed compared with the previous month.
These developments indicate that short-term trade performance improved, even though broader fiscal-year figures remain under pressure.
Year-on-Year Performance Shows Positive Export Growth in May
A comparison with the same month last year presents a more balanced picture.
Exports in May 2026 increased by 1.26 percent compared with May 2025. Additionally, imports fell by 6.63 percent over the same period.
This trend suggests that Pakistan experienced some improvement in external trade conditions during May. However, analysts note that one month of stronger performance may not be enough to offset the weaker results recorded earlier in the fiscal year.
Read more:Islamabad: Pakistan Considers ‘Easy Tax Scheme’ for Traders Ahead of Budget 2026-27
External Sector Faces Continued Challenges
Pakistan’s external sector continues to face several hurdles, including fluctuating global demand, higher production costs, and competitive pressures in international markets.
Furthermore, businesses remain concerned about energy costs, financing challenges, and supply chain issues that affect export competitiveness. As a result, export growth has remained slower than expected despite various policy measures aimed at boosting overseas sales.
Meanwhile, the country’s reliance on imported industrial inputs, machinery, petroleum products, and consumer goods continues to drive import spending.
Unless export growth accelerates significantly, economists warn that Pakistan may continue to face pressure on its trade balance and foreign exchange reserves.
Government Focus on Export-Led Growth
Economic policymakers have repeatedly emphasized the importance of increasing exports to strengthen Pakistan’s economy. Authorities aim to support export-oriented industries, diversify export products, and expand access to international markets.
Moreover, improving industrial productivity and attracting investment remain key priorities for reducing the trade gap over the long term.
Experts believe sustained export growth will play a crucial role in improving economic resilience and supporting future development goals.
Looking Ahead
The latest trade data highlights the challenges facing Pakistan’s economy as the fiscal year approaches its conclusion. Although May delivered some encouraging indicators, the overall picture remains difficult due to declining exports and a widening annual trade deficit.
Moving forward, policymakers will likely focus on strengthening export performance while managing import growth to improve the country’s external balance and support economic stability.
FAQs
How much did Pakistan’s trade deficit increase during FY2025-26?
Pakistan’s trade deficit increased by 17.48 percent during the July–May period of fiscal year 2025-26.
What was Pakistan’s total trade deficit during the first eleven months of the fiscal year?
The country recorded a trade deficit of $34.758 billion between July and May.
How much did Pakistan export during the period?
Pakistan earned $27.904 billion from exports during the first eleven months of FY2025-26.
What was the value of imports during the same period?
Imports reached $62.662 billion, showing a year-on-year increase of 5.94 percent.
Did exports improve in May 2026?
Yes. Exports increased by 9.59 percent compared with April and rose by 1.26 percent compared with May 2025.
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