ISLAMABAD: Trade deficit swells by 29 percent in the first two months of FY26 as the exports in August were down by 12.49 percent on a year-on-year basis.
According to the figures issued by the Pakistan Bureau of Statistics (PBS) on Tuesday, in July-August FY26, the exports from the country remained USD5.10 billion, showing a nominal increase of 0.65 percent. Whereas the imports increased by 14.23 percent in the first two months of FY26 and reached USD11.12 billion from USD9.73 billion in the corresponding period of last year. Resultantly trade deficit swells to USD6 billion compared to USD4.66 billion in the corresponding period of last year.
In August FY26, exports remained USD2.42 billion, showing a decline of 12.5 percent compared to the corresponding period of last year. On a month-on-month (MoM) basis, the exports are also down by 10 percent.
July trade deficit swells 44.16pc YoY
The import bill in August FY26 also showed an upward trend as it recorded at $5.29 billion compared to USD4.97 billion in the corresponding period of last year, showing an increase of 6.42 percent. However, on a MoM basis, the imports in August dip by 9.35 percent to USD5.28 billion compared to USD5.83 billion in July FY26.
It may be mentioned here that textile exports were up by 32.13 per cent on a year-on-year basis and 10.37 per cent on a month-on-month basis in July. However, according to sources in the textile sector, in August, the exports of textile products will definitely go down.
According to Muhammed H Shafqat, the Chief Executive of Pakistan Textile Council, the textile exports declined in August because of anomalies put in place in the Export Finance Scheme (EFS).
He said cotton, cotton yarn, and cotton grey cloth have been excluded from the ambit of EFS, and now textile exporters are forced to pay GST and customs duties on the import of raw materials, which has left them uncompetitive in the international market. “By September 3, the figures of textile exports will be unveiled and definitely they will show a downward trend,” he observed.
Experts believed that because of the catastrophe of floods, cotton and rice crops were badly affected, which are mainstay of the country’s exports, and there is likelihood that it will not only hit exports but also force the textile sector to import more cotton. Because of wrong policies and apathy of the government, the import bill of raw cotton was over $2 billion in FY25.
Meanwhile, as per statistics of the PBS, the exports of services in July FY26 increased by 18.27 percent to USD745.5 million on a YoY basis and 4.47 percent on a MoM basis.
Whereas, import of services reached USD71.4 million, showing a nominal decline of 0.61 percent on a YoY basis and an increase of 3.41 percent on a MoM basis. Balance of trade deficit in services in July FY26 is USD125.92 million, which declined by 48.91 percent on a YoY basis and 2.44 percent on a MoM basis.
Copyright Business Recorder, 2025
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