Pakistan’s trade imbalance widened sharply in the first seven months of the current fiscal year (July 2025–January 2026). Latest figures show imports rising to around $40.2 billion, while exports remained at approximately $18.2 billion. This left a cumulative trade deficit of about $22 billion, a significant increase compared with the same period last year.
The data, based on provisional figures from the Pakistan Bureau of Statistics (PBS), show that export earnings actually declined by roughly 7 percent in dollar terms compared with the previous year. In contrast, imports expanded by nearly 10 percent as demand for foreign goods recovered from tighter controls.
Major imports included capital goods such as machinery and industrial equipment, consumer items like smartphones and motor vehicles, as well as chemicals and petroleum products. The rise reflects not just renewed factory activity but also growing consumer demand after a period of import restrictions. Export receipts were dominated by textiles, rice, and other traditional commodities, but these sectors did not expand enough to keep pace with the import surge.
Economists warn that such a large gap puts pressure on Pakistan’s foreign exchange reserves and could affect the current account if not addressed. According to State Bank of Pakistan balance-of-payments data, the current account also posted a deficit in this period, reversing a surplus seen last year.
To narrow the gap, experts say export-boosting policies are needed, including market diversification, improving product quality, and incentives for export industries. They also suggest careful import management, especially in consumer goods, to reduce unnecessary outflows of foreign currency. Without such steps, the trade deficit may continue to strain the economy.
