Pakistan’s Trade Deficit Rises in FY26 Despite Growth in Services Exports
Pakistan’s trade deficit increased during the first eleven months of fiscal year 2025-26, reflecting higher imports and lower exports, according to the latest data released by the Pakistan Bureau of Statistics (PBS).
Official figures show that the country’s goods trade deficit reached $34.76 billion during July-May FY26, compared to the same period last year. Imports rose by nearly 6 percent to $62.66 billion, while exports declined by 5.6 percent to $27.9 billion.
The data indicates that Pakistan continues to rely heavily on imported goods, industrial inputs, and raw materials, contributing to the widening trade gap.
However, monthly figures for May 2026 showed some improvement. The trade deficit narrowed by 13.7 percent compared to May last year, reaching $2.58 billion. During the month, exports recorded a slight increase to $2.71 billion, while imports declined to $5.29 billion.
The services sector provided some positive support to the overall external account. During July-April FY26, the services trade deficit narrowed by 17.4 percent to $2.04 billion.
Services exports increased by 17.7 percent to $8.3 billion, supported by stronger performance in areas such as information technology and business services. Meanwhile, services imports rose at a slower pace of 8.6 percent.
In April alone, the services trade gap narrowed significantly as exports recorded strong growth while imports declined slightly.
Economic analysts note that the services sector remains one of Pakistan’s stronger-performing export segments. However, they emphasize that continued growth in exports and improvements in industrial productivity will be important for reducing the overall trade imbalance and strengthening the country’s external position.
The latest figures highlight both the challenges and opportunities facing Pakistan’s economy as policymakers focus on boosting exports, attracting investment, and supporting sustainable economic growth.
