Expansion of trade deficit in FY26 poses threat to economy: Mian Zahid

KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, has voiced serious concern over the sharp deterioration of Pakistan’s external sector, warning that the aggressive expansion of the trade deficit in the first quarter of fiscal year 2026 poses a significant threat to the nation’s economic stability.

He highlighted alarming data showing the goods trade deficit rose 32.9% year-on-year to $9.37 billion in Q1 July–September 2025, reversing previous gains. September alone saw a 46% jump to $3.34 billion.

He addressed the business community, noting that the growing trade gap harms economic resilience. Imports rose 13.5% to $16.97 billion this quarter, while exports fell 3.8% to $7.6 billion, reflecting challenges from high input and energy costs. The services trade deficit also grew 21.9% year-on-year to $437 million in August 2025.

Mian Zahid Hussain warned that the current path is putting great pressure on Pakistan’s foreign exchange reserves, which now cover only about three months of imports.

He stressed that if the deficit continues, it will heavily strain the State Bank’s ability to maintain external buffers.

Mian Zahid Hussain called on the government to act swiftly with focused measures: cut non-essential imports sharply and support exporters facing rising costs. Reducing energy costs for export industries is vital for economic survival and growth, ensuring we earn the foreign exchange needed to reduce the growing trade deficit.

Copyright Business Recorder, 2025