Pakistan’s trade situation in FY26 has shown growing pressure on the external account as the goods trade deficit widened by 17.48% to $34.758 billion during the first eleven months of the fiscal year. The latest figures from the Pakistan Bureau of Statistics highlight a clear imbalance between rising imports and falling exports, which continues to strain the country’s economy.
Imports increased by 5.94% to $62.66 billion, mainly driven by energy needs, machinery, and industrial raw materials. This shows that Pakistan remains heavily dependent on foreign goods to support both industrial activity and daily consumption. At the same time, exports fell by 5.6% to $27.9 billion, reflecting weaker global demand and limited export diversification. The gap between imports and exports has therefore widened significantly, putting pressure on foreign exchange reserves and the Pakistani rupee.
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Despite this overall negative trend, some monthly improvement was observed in May 2026. The trade deficit narrowed by 13.7% year-on-year to $2.58 billion, as exports slightly increased by 1.26% while imports declined by 6.6%. This suggests a temporary slowdown in domestic demand and some short-term stability, although analysts warn it may not represent a long-term recovery.
In the services sector, Pakistan showed relatively positive performance. The services trade deficit narrowed by 17.4% to $2.04 billion during July–April FY26. Services exports rose strongly by 17.7% to $8.3 billion, mainly supported by IT and business services. This sector continues to be one of the few stable areas of external earnings, even though its size is still not large enough to offset the goods trade gap.
Overall, the economy remains under pressure due to structural issues such as import dependency, weak industrial output, and limited export diversification. Energy imports and textile-heavy exports continue to dominate trade flows. While government efforts to control imports and support exporters have provided some relief, the trade imbalance remains a key challenge for economic stability in FY26.
