Pakistan’s regional trade deficit surges to $4.97bn

Pakistan’s trade deficit with nine neighbouring countries increased by 26.62 per cent to $4.97 billion during

Pakistan’s trade deficit with nine neighbouring countries increased by 26.62 per cent to $4.97 billion during the first quarter of fiscal year 2026-27, compared with $3.93 billion in the same period last year. The widening deficit reflects declining exports to regional markets and a sharp increase in imports, particularly from China.

According to the latest data compiled by the State Bank of Pakistan (SBP), Pakistan’s exports to nine neighbouring countries fell by 6.72 per cent to $944.24 million during July-September 2026, down from $1.01 billion in the corresponding period of the previous fiscal year. Meanwhile, imports rose by 19.79 per cent to $5.92 billion from $4.94 billion.

The increase in imports from China was the main contributor to the widening trade gap. Pakistan’s imports from China climbed by 19.76 per cent to $5.82 billion during the first quarter, compared with $4.85 billion a year earlier. The bilateral trade deficit with China widened by $858.81 million, accounting for around 82.18 per cent of the overall increase in the deficit with the nine countries.

However, Pakistan’s exports to China showed improvement. Shipments increased by 17.95 per cent to $663.57 million during the quarter, up from $562.56 million in the same period last year.

Trade with Afghanistan recorded a significant decline. Pakistan’s exports to the neighbouring country plunged by 88.34 per cent to $18.86 million from $161.76 million a year earlier. Imports from Afghanistan also dropped by 94.40 per cent to $250,000 from $4.52 million.

Trade between the two countries has remained suspended since October 10, 2025, further affecting Pakistan’s regional export performance.

Pakistan’s exports to Bangladesh declined by 2.96 per cent to $174.77 million during July-September, compared with $180.12 million in the corresponding period last year. Imports from Bangladesh also fell by 36.11 per cent to $13.88 million from $21.73 million.

Meanwhile, Pakistan’s imports from India increased by 68.90 per cent to $61.74 million, up from $36.55 million in the same period last year. However, no exports to India were recorded during the first quarter of FY27.

The overall figures cover Pakistan’s trade with Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives. The decline in exports to several regional markets, combined with rising imports, has further widened Pakistan’s trade imbalance with its neighbours.