Pakistan's trade gap with regional countries widens 26.62pc in first quarter of FY27

Pakistan's trade deficit with nine neighboring nations widened by 26.62 percent to $4.97 billion during the first quarter of 2026-27, as reported by the State Bank of Pakistan. This increase contrasts sharply with a deficit of $3.93 billion during the same period in the previous year. The broader trade gap is largely attributed to a decline in exports to regional markets, particularly to Afghanistan and Bangladesh, where exports have been suspended since October 10, 2025.

The trade deficit with China surged by $858.808 million, accounting for approximately 82.18 percent of the overall increase. This sharp rise in the bilateral deficit with China was primarily due to a 19.76 percent surge in imports from the country, which climbed to $5.82 billion in the July-September quarter of FY27 from $4.85 billion in the comparable period last year.

Exports to Afghanistan declined significantly by 88.34 percent, falling to $18.86 million in the first quarter of FY27, down from $161.76 million the previous year. Imports from Afghanistan, while minuscule, saw an even steeper decrease of 94.40 percent, standing at $0.25 million in the first quarter of FY27, compared to $4.52 million in FY26.

Exports to Bangladesh experienced a slight decline of 2.96 percent, falling to $174.77 million in the first quarter of FY27 from $180.12 million in the same period last year. Conversely, imports from Bangladesh decreased by a more pronounced 36.11 percent, narrowing to $13.88 million in the first quarter of FY27 from $21.73 million in the same period of the previous fiscal year.

The overall trade deficit with the nine neighboring countries contracted by 6.72 percent to $944.24 million in the July-September quarter of FY27, down from $1.01 billion in the corresponding period of the previous year. However, the rise in imports from China significantly offset this decline.