Pakistan’s trade deficit surges 20% YoY to $3.9bn in October 2026

Pakistan’s trade deficit significantly increased by nearly 20% to $3.88 billion in October 2026, as compared to the same month of the previous year, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.

The country’s trade balance, the gap between exports and imports, was recorded at a deficit of $3.24 billion in October 2025.

The trade deficit expanded year-on-year (YoY) in October 2026, driven by higher imports and a lacklustre growth in exports.

Exports in October 2026 stood at $2.93 billion, up 2.8% from $2.85 billion recorded in October 2025.

Meanwhile, imports were recorded at $6.81 billion, up nearly 12% against $6.09 billion in the same period last year (SPLY).

On a month-on-month (MoM) basis, the trade deficit was up over 10% in October 2026 against $3.52 billion in September 2026. The surge came amid an increase in imports while exports remained flat.

During the first four months of the fiscal year 2026-27 (4MFY27), the country’s trade deficit increased by nearly 16% to $14.63 billion from $12.61 billion recorded in SPLY.

Imports in 4MFY27 increased by over 12% to $25.96 billion from $23.06 billion in SPLY.

On the other hand, exports in 4MFY27 rose over 8% to $11.34 billion from $10.45 billion recorded in 4MFY26.

“While higher imports may partly reflect domestic economic activity, the persistent gap between import and export growth is adding to external financing requirements,” Waqas Ghani, Head of Research at JS Global, told Business Recorder.

He said that the widening goods trade deficit could put pressure on the current account and foreign reserves, particularly if elevated global energy prices sustain the import bill.

“The key concern remains the lack of a meaningful acceleration in exports to finance imports. Pakistan’s external account stability will continue to depend on remittance inflows and services exports,” he added.

Pakistan heavily relies on imports for essential items such as fuel, machinery, chemicals, and food. Petroleum products constitute a large portion of the import bill, straining foreign exchange reserves. There has been a surge in automobile imports.

Meanwhile, Pakistan’s exports are often consumer-based and traditional, like rice, raw cotton, textiles, and leather. The country’s manufacturing sector is skewed towards low-value-added products. Exports have been negatively impacted by factors such as high energy tariffs, rising taxation, expensive financing, policy uncertainty, and declining competitiveness.