Pakistan's trade deficit widened by 22 percent to $39.5 billion in the fiscal year ended June 2026, according to official data released by the Pakistan Bureau of Statistics (PBS). The data, released this week, shows that the country's imports increased by 8 percent to $69.6 billion, while exports declined by 6 percent to $30.1 billion during the fiscal year 2025-26.
Monthly Trade Deficit Surges 57% in June
On a month-on-month basis, Pakistan's trade deficit widened by 57 percent to $4.53 billion in June 2026. Exports fell by 10 percent to $2.24 billion, while imports surged by 26 percent to $6.77 billion, according to PBS data.
Muhammad Waqas Ghani, head of research at JS Global Capital Limited, described the trade deficit as structural. "Pakistan's trade deficit is structural because the economy relies heavily on imported energy, machinery and industrial raw materials, while exports remain concentrated in low value-added products such as textiles," Ghani told Arab News on Saturday.
Textile Exports Stagnate
Textiles remain Pakistan's largest export sector, earning $17.97 billion last year, up just 0.34 percent from $17.91 billion a year earlier, according to data shared by the All Pakistan Textile Mills Association (APTMA). Ghani noted that as domestic demand and growth recover, imports are rising much faster than exports, causing the trade gap to widen.
Islamabad achieved 3.7 percent economic growth last year and is targeting 4 percent growth in the current fiscal year.
Central Bank Governor Expresses Concern
The Ministry of Commerce spokesperson, Naveed-ul-Haq Kallu, did not respond to questions seeking comment on the widening trade deficit or the measures the government is taking to address it. However, State Bank of Pakistan (SBP) Governor Jameel Ahmad raised the issue during a media briefing in Karachi this week.
"The increase in trade deficit is a big concern, and its solution lies only in increasing exports," Ahmad said. "To increase exports, the government has announced many incentives in the new budget while we [at the SBP] too are bringing further improvements to the export refinance scheme," he added.
Business Leaders Warn of Industrial Closures
Business leaders also expressed concern over the widening trade gap. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) called the deficit a "massive deterioration in Pakistan's trade balance."
"The effect of plunging exports poses a critical threat to the country's external account stability and foreign exchange reserves," Atif Ikram Sheikh, FPCCI president, said in a statement. "It is a clear indicator that our export-oriented industries are being pushed to the wall," he added.
Sheikh urged the government to rationalize energy costs, reinstate the Final Tax Regime (FTR) for exporters, and lower the policy rate to prevent widespread industrial closures and a further decline in exports.
