Trade Deficit Widens to $14.6 Billion

ISLAMABAD: Pakistan’s trade deficit increased by 16 percent to $14.6 billion during the first four months (July–October) of the current fiscal year, driven primarily by a sharp rise in imports and sluggish export growth, raising concerns over the country’s external financing needs and dependence on foreign borrowing.

According to the Pakistan Bureau of Statistics (PBS), the trade deficit widened by approximately $2 billion compared with the corresponding period of the previous fiscal year.

Imports reached $26 billion during July–October, registering an increase of $2.9 billion, or 12.5 percent, compared with the same period last year.

In contrast, exports recorded only modest growth, reaching $11.4 billion during the four-month period. This represented an increase of just $890 million compared with the corresponding period of the previous fiscal year.

On a monthly average basis, imports stood at approximately $6.5 billion, while exports averaged $2.8 billion.

The widening trade gap comes at a time when Pakistan continues to face substantial external debt repayment obligations. Finance Minister Muhammad Aurangzeb recently disclosed that Saudi Arabia had extended the maturity of an additional $3 billion loan to Pakistan.

Finance Secretary Imdadullah Bosal informed a parliamentary committee that the country had significant external debt repayment commitments. He said the government would seek extensions on bilateral and commercial loans while continuing efforts to secure additional foreign financing to maintain foreign exchange reserves.

Prime Minister Shehbaz Sharif has pledged that the 25th International Monetary Fund (IMF) programme would be Pakistan’s last. The programme is scheduled to conclude in September next year, although the government's commitment will face a significant economic test in the coming years.

The State Bank of Pakistan has projected that the country's imports could reach $71 billion during the current fiscal year, largely due to an expected increase in energy import costs.

Meanwhile, the government has set a merchandise export target of $34 billion for the fiscal year. To encourage export growth, the federal budget allocated Rs88 billion in subsidies to provide concessional financing to major exporters.

However, previous substantial depreciation of the Pakistani rupee has failed to deliver a significant boost to exports.

Federal Minister for Planning Ahsan Iqbal has stated that Pakistan needs to increase its exports to $60 billion to achieve lasting independence from IMF programmes.

Despite the government's trade liberalisation policy and financial incentives for exporters, the expected acceleration in exports has yet to materialise.

The widening trade deficit highlights the structural weaknesses in Pakistan's external sector, particularly the imbalance between import growth and export performance.

Unless the country substantially expands its export base, dependence on foreign borrowing and external financial assistance is likely to persist.

Trade Deficit Widens to $14.6 Billion in First Four Months of FY2026-27