Pakistan’s goods trade deficit expanded sharply during the first eleven months of FY26, reflecting continued pressure on the country’s external account. Official data released on Wednesday showed the deficit widened 17.48% to $34.758 billion, driven by falling exports and rising imports. However, monthly figures offered limited signs of easing, as the gap narrowed slightly in May.
Rising imports and weakening exports strain account
According to data from the Pakistan Bureau of Statistics, imports increased 5.94% to $62.66 billion during July–May, while exports declined 5.6% to $27.9 billion compared with $29.56 billion a year earlier. As a result, Pakistan remained heavily dependent on imported goods and raw materials. Analysts said higher import bills, combined with weaker global demand, continued to weigh on trade performance.
Meanwhile, monthly data suggested some cooling in domestic demand. In May 2026, the trade deficit narrowed 13.7% year-on-year to $2.58 billion. During the same month, exports edged up 1.26% to $2.71 billion, while imports fell 6.6% to $5.287 billion. Officials said this trend could indicate gradual stabilisation if sustained in coming months.
Services sector offers partial relief
The services trade account provided modest support to the overall balance. During July–April FY26, the services trade deficit narrowed 17.4% to $2.04 billion. Services exports rose a strong 17.7% to $8.3 billion, outpacing an 8.6% increase in imports.
In April alone, the services gap shrank sharply to $26.1 million from $163 million a year earlier. Exports jumped 21.7% to $915 million, while imports declined 2.8%. Analysts noted that IT and business services remain key bright spots for Pakistan. However, they cautioned that services growth alone cannot yet offset the large goods trade imbalance.
