Pakistan’s Trade Deficit Widens to $39.5 Billion Amid Falling Exports

ISLAMABAD: Pakistan’s trade deficit surged 22% to $39.5 billion in the fiscal year ending June 2026, driven by the economy’s heavy reliance on imports and a decline in exports amid economic slowdown, according to data released by the Pakistan Bureau of Statistics (PBS).
The data showed that national imports rose 8% to $69.6 billion during FY2025-26, while exports fell 6% to $30.1 billion. On a month-on-month basis, June alone saw the trade deficit jump 57% to $4.53 billion, as exports dropped 10% to $2.24 billion while imports climbed 26% to $6.77 billion.
Muhammad Waqas Ghani, head of research at JS Global Capital Limited, told Arab News that Pakistan’s trade deficit is “structural in nature,” as the economy remains heavily dependent on imported energy, machinery and industrial raw materials, while exports remain largely confined to low-value-added products such as textiles.
According to data from the All Pakistan Textile Mills Association (APTMA) cited in the Arab News report, the textile sector — Pakistan’s largest export industry — earned $17.97 billion last year, up just 0.34% from $17.91 billion the previous year.
Ghani noted that as domestic demand and growth improve, imports are rising much faster than exports, further widening the trade gap. State Bank of Pakistan Governor Jameel Ahmad, however, described the trade deficit as “worrying” during a media briefing in Karachi this week.
Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), warned that the country’s external account and foreign exchange reserves face serious risks from declining exports, calling it a clear sign that export-oriented industries are being pushed into extremely difficult conditions.