Trade Deficit Worsens Again After Poor Exports

Pakistan's trade deficit expanded by 16 percent year-on-year to $14.6 billion during the first four months of FY27, July to October, as imports continued to outpace exports, according to provisional data from the Pakistan Bureau of Statistics. The gap widened to $3.9 billion in October alone, a 20 percent increase compared to the same period last year.

The monthly trade deficit rose by 10 percent compared to September's $3.5 billion, while imports reached $6.8 billion in October, growing 12 percent year-on-year and 6 percent month-on-month. Exports stood at $2.9 billion, increasing by only 3 percent year-on-year and remaining steady from the previous month.

Compared to October 2025, when the trade deficit was around $3.2 billion, import payments jumped by approximately $719 million, while export earnings grew by just $81 million. Over the first four months of FY27, Pakistan's cumulative trade deficit reached $14.6 billion, up from $12.6 billion in the same period last year. Imports totaled $26 billion, increasing 13 percent year-on-year, whereas exports rose by 9 percent to $11.3 billion over the same period.

The widening trade deficit places additional pressure on Pakistan's need for foreign exchange, potentially affecting the rupee's value and foreign exchange reserves. It may also lead to higher costs for imported goods such as fuel, medicines, electronics, and industrial inputs, which could impact households and businesses.