Industrialists Concerned As Pakistan’s Trade Deficit Rises 15% To $10.8bn
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✧ GENERATE BRIEFING
Pakistan’s external trade imbalances have intensified significantly, with the national trade deficit widening by 15.13% to reach $10.79 billion during the first quarter (July–September) of the 2026–27 fiscal year, compared to $9.37 billion recorded in the same period last year. According to official data released by the Pakistan Bureau of Statistics (PBS), the growing trade gap materialized despite positive momentum in external shipments. Exports during 1QFY27 advanced by nearly 11% to $8.42 billion (up from $7.59 billion a year earlier), propelled by a robust 17.6% year-on-year increase in September exports alone to $2.94 billion. However, import expansion outpaced export earnings, climbing 13.2% to $19.22 billion during the quarter, driven by heightened industrial demand and rising foreign procurement bills. Furthermore, business groups emphasized the necessity of targeting higher-value sectors—such as IT, engineering, pharmaceuticals, and specialized manufacturing—while optimizing trade diplomacy to ensure that export expansion can effectively buffer the economy against widening external imbalances.
Business leaders have expressed concern over Pakistan’s widening trade deficit, which increased by 15.13% to $10.79 billion during the first quarter of fiscal year 2026-27 (1QFY27), citing rising imports and persistent challenges facing exporters.
According to Pakistan Bureau of Statistics (PBS) data, the trade deficit stood at $9.37 billion in the same period last year. The widening gap came despite an improvement in exports during the quarter.
Exports increased by nearly 11% to $8.42 billion in July-September from $7.59 billion a year earlier. September exports alone rose 17.6% year-on-year to $2.94 billion, indicating some recovery in external sales.
However, imports expanded at a faster pace, rising 13.2% to $19.22 billion from $16.97 billion in 1QFY26. In September, imports increased by more than 11% year-on-year to $6.49 billion.
Industry Concerns and Reserve Pressures
United Business Group (UBG) President Zubair Tufail warned that continued import growth could put pressure on Pakistan’s foreign exchange reserves and external payment obligations. He called for an immediate strategy focused on expanding exports while managing the import bill.
Tufail urged the government to reduce electricity, gas and other production costs, facilitate imports of industrial raw materials and machinery, and ensure timely payment of exporters’ refunds. He also called for greater focus on IT, engineering, pharmaceuticals, rice, leather, sports goods and surgical instruments alongside traditional textile exports.
Roadmap for Export Competitiveness
The business community has also called for a coordinated Export Growth Roadmap involving the government, State Bank of Pakistan and private sector. Tufail proposed assigning measurable export-promotion targets to commercial counsellors at Pakistani diplomatic missions and strengthening international marketing efforts.
Exporters are meanwhile facing high manufacturing costs, tax and liquidity pressures, refund delays and higher shipping expenses linked to disruptions in regional trade routes. Industry representatives have warned that these constraints are reducing the competitiveness of Pakistani products in international markets.
The widening trade gap highlights the challenge of ensuring that stronger export growth keeps pace with rising import demand. Business groups have urged policymakers to support productive imports while discouraging non-essential purchases and expanding value-added and services exports to contain the external imbalance.
