Pakistan trade deficit widens 25pc to $25bn in 8 months

Pakistan’s merchandise trade deficit widened by a quarter from a year earlier to $25 billion in the first eight months of the fiscal year, with the import bill more than double export earnings. This highlighting renewed strain on the country’s external position, official data showed Monday.

Figures released by the Pakistan Bureau of Statistics showed imports during July-February FY26 rose 8.1 percent to $45.5 billion, while exports dropped 7.3 percent to $20.46 billion, leaving the import bill more than double the country’s goods sales abroad.

The gap continued to widen in February 2026, with the monthly trade deficit expanding 4.6 percent year-on-year to $2.98 billion. Exports fell 8.76 percent from a year earlier to $2.27 billion, while imports reduced 1.6 percent to $5.25 billion.

On a month-on-month basis, the slowdown was sharper. February exports plunged 25.6 percent from January’s $3.05 billion, while imports declined 9.5 percent from $5.8 billion.

The services sector offered limited relief. The services trade deficit widened 14 percent to $2.07 billion in July-January FY26, compared with $1.82 billion a year earlier, even as exports rose 18.78 percent to $5.66 billion. Services imports climbed 17.5 percent to $7.7 billion over the same period.

In January alone, the services deficit grew 5.1 percent year-on-year to $304.8 million. Services exports jumped 31 percent to $885 million, but imports outpaced at $1.189 billion, up 23.3 percent.

In the last fiscal year (FY25), the services trade deficit had narrowed 15.8 percent to $2.62 billion, driven by a 9.2 percent rise in services exports to $8.4 billion, compared with a modest 2 percent increase in imports to $11 billion.

Economists say the expanding goods deficit driven by subdued export momentum and resilient import demand, could strain foreign exchange reserves and keep pressure on the rupee unless export competitiveness improves or import compression deepens.