Pakistan’s FY2025-26 Trade Deficit Rises 21.57% to $39.47 Billion as Exports Decline
Key Developments:
- Pakistan’s trade deficit widened 21.57% to $39.47 billion during FY2025-26.
- Exports declined nearly 6%, while imports rose almost 8%, widening the external trade gap.
- June recorded a sharp increase in imports alongside falling exports, resulting in a significantly larger monthly trade deficit.
ISLAMABAD (Business Recorder) — July 3, 2026: Pakistan’s merchandise trade deficit expanded by 21.57 percent during the fiscal year 2025-26, reaching $39.471 billion, according to the latest figures released by the Pakistan Bureau of Statistics (PBS). The increase was driven by lower export earnings and higher import spending, reflecting continued pressure on the country’s external trade balance.
Official PBS data shows that Pakistan’s exports declined to $30.126 billion during FY2025-26, compared with $32.040 billion recorded in the previous fiscal year, representing a 5.97 percent year-on-year decrease.
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Meanwhile, imports increased to $69.597 billion, up 7.89 percent from $64.507 billion in FY2024-25. The faster growth in imports relative to exports contributed directly to the widening trade deficit.
The trade performance for June 2026 also reflected mounting pressure on external accounts. Exports during the month fell 9.61 percent year-on-year to $2.239 billion, compared with $2.477 billion in June of the previous year.
At the same time, imports surged 26.27 percent to $6.767 billion, up from $5.359 billion in the corresponding month last year, resulting in a substantially wider monthly trade gap.
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According to additional analyses published following the PBS release, Pakistan’s annual export earnings also fell short of the government’s export target for FY2025-26. Analysts noted that while imports were supported by higher domestic demand and increased petroleum-related purchases, export growth remained under pressure throughout much of the fiscal year.
Economic observers say narrowing the trade deficit will require sustained improvements in export competitiveness, diversification of export products, and measures to strengthen industrial productivity while managing import growth.
Although Pakistan continues to rely on workers’ remittances and other external inflows to help finance its import bill, economists generally view stronger export performance as essential for improving long-term external sector stability.
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