ISLAMABAD-The Pakistan trade deficit, for the first four months of FY26, increased dramatically by 39 percent year-on-year to USD 12.7 billion on the back of declining exports in key sectors and surging petroleum imports that have once again started weighing on the country’s external accounts.
According to the latest data released by Pakistan Bureau of Statistics, Pakistan’s exports fell by 4 percent YoY during July to October, reaching USD 10.4 billion, while imports jumped 15.5 percent, widening the country’s trade gap even further. In October, exports dropped 4.5 percent compared to last year but improved 14 percent from the previous month to hit USD 2.8 billion. Imports, on the other hand, continued to rise—up 21.65 percent year-on-year and 4.84 percent month-on-month to USD 6.13 billion—showing that import-led pressure remains strong.
Food was one of the worst performers, as the country’s overall food exports declined 35 percent during the first four months of FY26. Rice exports took a severe beating, decreasing 46.4 percent on-year, with the export of Basmati rice falling 39 percent and IRRI-6 and IRRI-9 varieties suffering a 49.65 percent drop in their exports. Vegetable exports plummeted 41 percent, while tobacco decreased 28.5 percent. In comparison, only the export of fish and fish preparations and fruits went up by 12.8 percent and 11.78 percent, respectively.
The country’s single largest export segment – textiles – saw exports rise a modest 4 percent during the July–October period. Within this category, the most significant increases were seen in tents, canvas and tarpaulin, up 32.34 percent, followed by knitwear, which was up 8.23 percent, cotton yarn up 7.74 percent, non-cotton yarn up 7.50 percent, bedwear up 6.94 percent, and readymade garments up 5.11 percent, while cotton cloth was down 12.75 percent, towels by 0.28 percent, and art, silk and synthetic textiles down 0.98 percent.
Outside of textiles, carpet, rug and mat exports were down 12 percent; leather (tanned) was down 2.45 percent; and leather products declined a nominal 0.34 percent. Sports goods exports fared relatively better, with a 17.74 percent rise driven by football exports, which were up 26 percent, though gloves were down 9.18 percent. Footwear exports were up only 1.12 percent.
On the import side, the major contribution to widening the trade deficit came from a significant increase in petroleum-related products. Petroleum products rose by 10.47 percent, crude oil by 13.57 percent, while LNG imports declined by 29.18 percent during the July–October period. Synthetic fiber and worn clothing gained 37 percent and 12 percent, respectively, among textile-related imports.
In October alone, crude oil imports jumped 79.84 percent year-on-year, while imports of petroleum products went up 38 percent. Imports of palm oil were also 19 percent up year-on-year, though 10 percent down month-on-month, and imports of iron and steel scrap were up 17 percent year-on-year and 9 percent month-on-month.
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A notable increase was observed in the automotive sector as imports of motor cars (CKD/SKD) went up by 155 percent YoY and 12.73 percent MoM, reflecting fresh demand on the back of previous restrictions. However, mobile phone imports declined steeply, which showed a decline of 16 percent on a year-over-year basis and 27.5 percent on a month-over-month basis.
Overall, the latest figures indicate a tightening pressure on Pakistan’s external sector due to weakened export performance in several key categories and sustained rises in import expenditures, in particular energy products, with fresh challenges for policymakers seeking to stabilize the country’s trade balance in the months ahead.
