Industrialists express concern over 15% surge in Pakistan’s trade deficit in 1QFY27

Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), expressed concern over the widening of Pakistan’s trade deficit during the first quarter of the fiscal year 2026-27 (1QFY27), read a statement on Monday.

Responding to the latest official figures released by the Pakistan Bureau of Statistics (PBS), Sheikh cautioned that the escalating import bill threatens the country’s macroeconomic stability and will exert pressure on national foreign exchange reserves.

He highlighted that the PBS data reveals that the trade deficit widened by 15.13% to reach $10.8 billion during the July-September 2026 period, up from $9.4 billion in the corresponding period of the previous fiscal year.

FPCCI chief noted that the trend persisted through the end of the quarter.

Sheikh stressed that the widening trade gap is a direct consequence of the “exceptionally high cost of doing business in Pakistan, which severely hampers the competitiveness of local manufacturers against regional peers,” read the statement.

He highlighted that “prohibitive interest rates, massive capacity charges on electricity, and elevated petroleum levies act as immense barriers to industrial productivity and value addition”.

The industrialist warned that without immediate structural interventions, the continuous pivot to imports to meet domestic demand will further exhaust the national exchequer and trigger a balance of payments crisis.

FPCCI president maintained that, to rescue the FY27 export targets and prevent widespread industrial stagnation, the FPCCI leadership urges the Ministry of Finance and the State Bank of Pakistan to “aggressively reduce the policy rate to single digits to provide affordable working capital to manufacturers”.

Sheikh also called for the rationalisation of electricity and gas tariffs to align them with regional competitors, alongside targeted relief on inland logistics to bring down domestic supply chain costs.