Exports recover in January but trade deficit remains high at $2.72 billion

By Staff Reporter

ISLAMABAD: Pakistan’s trade deficit widened sharply in the first seven months of the fiscal year, driven by a surge in imports and a drop in exports, according to official data released on Monday, showing persistent pressures on the country’s external accounts amid economic challenges.

The deficit, which measures the gap between exports and imports, expanded 28.22% year-on-year to $22.04 billion in July-January of fiscal year 2026, compared with $17.19 billion in the same period a year earlier, figures from the Pakistan Bureau of Statistics showed. Exports during the seven-month period fell 7.1% to $18.20 billion from $19.58 billion in the prior year, while imports climbed 9.42% to $40.23 billion from $36.77 billion.

The widening gap comes as Pakistan grapples with efforts to stabilize its economy, including measures to boost exports and curb non-essential imports, though global commodity prices and domestic demand have influenced trade flows. In December 2025 alone, the trade deficit had surged 24% year-on-year to $3.7 billion, reflecting ongoing imbalances that have prompted policymakers to monitor the situation closely.

However, January 2026 offered some signs of moderation. Exports rose 3.73% year-on-year to $3.06 billion from $2.95 billion in January 2025, marking a positive shift after several months of declines. Imports, meanwhile, edged down 1.41% to $5.79 billion from $5.87 billion a year earlier, helping to narrow the monthly deficit. As a result, Pakistan’s trade deficit in January stood at $2.72 billion, a decrease of 6.61% from $2.92 billion in the same month last year.

On a month-on-month basis, the deficit shrank 28.53% from $3.81 billion in December 2025, providing a respite amid broader concerns over foreign exchange reserves and currency stability. The latest figures align with other economic indicators, including inflation, which eased to 5.8% in January 2026, potentially offering room for monetary policy adjustments.

Pakistan’s fiscal year runs from July to June, and the trade data is closely watched by investors and analysts as a barometer of economic health in the South Asian nation, which has relied on international bailouts in recent years to avert balance-of-payments crises.