Pakistan’s trade imbalance with neighbouring countries has widened sharply, highlighting growing pressure on the country’s regional trade performance. The deficit reached $4.97 billion during the first quarter of fiscal year 2026-27.
According to State Bank of Pakistan data, the deficit increased by 26.62% from $3.93 billion in the same period last year. Rising imports and declining exports contributed to the growing gap.
Imports Rise While Exports Decline
Pakistan’s imports from nine neighbouring countries rose by 19.79% to $5.92 billion between July and September 2026. Imports stood at $4.94 billion during the corresponding period last year.
Meanwhile, exports to these countries fell by 6.72% to $944.24 million, compared with $1.01 billion a year earlier.
The nine countries include China, Afghanistan, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives.
China Drives the Growing Trade Gap
China accounted for much of the increase in Pakistan’s regional trade deficit. Imports from China climbed 19.76% to $5.82 billion during the quarter.
However, Pakistan’s exports to China also grew by 17.95%, reaching $663.57 million. Despite this increase, the substantial difference between imports and exports continued to widen the bilateral trade gap.
Pakistan’s imports from India also rose by 68.90% to $61.74 million. However, the country recorded no exports to India during the period.
Afghanistan Trade Remains Severely Disrupted
Pakistan’s exports to Afghanistan plunged by 88.34% to $18.86 million. Exports had reached $161.76 million during the same period last year.
Trade with Afghanistan has remained suspended since October 10, 2025, further affecting regional exports.
Exports to Bangladesh also declined by 2.96% to $174.77 million. Meanwhile, imports from Bangladesh dropped by 36.11% to $13.88 million.
The latest figures underline the challenge Pakistan faces in strengthening regional exports while managing its rising dependence on imported goods.
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