Trade gap widens 23% with imports outpacing exports

• Imports top $50bn, exports fall to $22.7bn.
• March deficit widens to $2.73 billion.
• Services deficit also increases in Jul-Feb FY26.
  

ISLAMABAD: Pakistan’s merchandise trade deficit widened 22.65% year-on-year to $27.81 billion in the first nine months of the current fiscal year as imports remained more than twice the value of exports, official data showed on Monday, adding to concerns over the country’s fragile external position, The News reported.

According to the Pakistan Bureau of Statistics, imports during July-March FY26 rose 6.6% to $50.54 billion, while exports fell 8.04% to $22.7 billion, underscoring a widening imbalance that economists warn could erode foreign exchange reserves and put renewed pressure on the rupee.

The strain persisted in March 2026, when the monthly trade deficit expanded 3.7% year-on-year to $2.73 billion. Exports dropped 14.4% to $2.26 billion, while imports also declined 5.4% to $4.995 billion.

Services trade on the other hand provided little cushion. The services deficit widened 3.1% to $2.14 billion in July-February FY26, as a healthy 18.4% rise in services exports to $6.46 billion was outpaced by a 14.2% surge in services imports to $8.6 billion.

One positive sign came in February 2026, when the services deficit fell 62% from a year earlier to $97.8 million. However, analysts warned not to read too much into just one month’s data.

With export momentum subdued and import demand proving resilient, economists say meaningful deficit reduction will require either a significant boost in export competitiveness or a sustained compression of imports, neither of which appears imminent.