Pakistan’s merchandise trade deficit expands by 20 per cent report

Islamabad, May 5 (PTI) Pakistan’s merchandise trade deficit expanded by 20 per cent to USD 32 billion during the first 10 months of the current fiscal year, heightening concerns about the country’s fragile economic outlook, according to a report.
    Quoting official data from the Pakistan Bureau of Statistics (PBS), The News reported that imports were more than double the value of exports.
    According to the PBS data imports during July-April of fiscal year 2026 climbed nearly 7 per cent to USD 57.2 billion, while exports slid more than 6 per cent to USD 25.2 billion, a lopsided gap that economists warn could drain foreign exchange reserves and put pressure on the Pakistani rupee, the report said.
    The deterioration continued into April 2026, when the monthly trade deficit widened nearly 4 per cent from a year earlier to just over USD 4 billion.
    Monthly exports rose 14 per cent to USD 2.48 billion, but were easily outpaced by imports, which climbed 7.5 per cent to USD 6.55 billion.
    Services trade offered little relief. The services trade deficit narrowed 6.7 per cent to USD 2.15 billion during July-March FY26, as a healthy 17 per cent rise in services exports to USD 7.35 billion was outrun by a nearly 11 per cent surge in services imports to USD 9.5 billion.
    One bright spot emerged in March 2026, when the monthly services deficit collapsed 81 percent year-on-year (YoY) to just USD 22.9 million, down sharply from USD 120 million a year earlier. Services exports in March grew 16 per cent to USD 903 million, while imports edged up just 3 per cent to USD 925 million.
    “The performance of services trade has been encouraging for Pakistan in recent months,” a trade analyst noted.
Still, the bigger problem remains. Pakistan’s exports are growing slowly while imports stay high.
    This makes it hard for the country to balance its finances. The situation is made worse because Pakistan still depends heavily on foreign loans to keep its cash reserves stable, according to The News.

(This story has not been edited by THE WEEK and is auto-generated from PTI)