The Pakistan Bureau of Statistics (PBS) released its year-end macroeconomic data, revealing that the country’s merchandise trade deficit widened by 21.57 percent to reach $39.471 billion for the fiscal year 2025-26. This sharp expansion from the $32.467 billion deficit recorded in the previous fiscal year highlights persistent vulnerabilities on the external account. A combination of rising import demand and contracting export revenues drove the trade gap to a four-year high, complicating the federal government’s ongoing economic stabilization efforts.
Total export earnings for FY26 dropped by 5.97 percent, falling to $30.126 billion compared to $32.040 billion in the preceding year. The contraction was heavily pronounced in June, where monthly shipments plummeted by 9.61 percent year-on-year. Exporters continue to grapple with structural constraints, including elevated energy costs, high inflation, and supply chain inefficiencies that have diminished the regional competitiveness of core sectors like textiles.
Conversely, the national import bill expanded by 7.89 percent to finish the fiscal year at $69.597 billion, up from $64.507 billion last year. The surge was fueled by an accelerating reliance on foreign energy inputs—including petroleum, crude oil, and liquefied natural gas (LNG)—alongside essential machinery and industrial raw materials. Moving forward, bridging this persistent gap will require aggressive export diversification, structural energy reforms, and enhanced regional trade facilitation to shield foreign exchange reserves from further pressure.
