Trade deficit at $3.2B in Oct as Pakistan imports hit 3-year high

Pakistan’s imports increased to a 40-month high in October, ballooning the trade deficit to over $3.2 billion, according to official data.

The trade balance – exports minus imports – showed a deficit of $3.21 billion, up 56% from $2.06 billion in October 2024.

Month-on-month, the deficit fell 4.2% from $3.35 billion in September.

Pakistan Bureau of Statistics (PBS) data showed imports increased to $6.06 billion in October, with exports lagging at mere $2.85 billion. Year-on-year, imports increased by 20.2% from $5.04 while exports fell by 4.5% from 2,982 billion in October 2024.

Month-on-month, imports increased by 3.6% from $5.85 billion and exports 14% from $2.5 billion.

According to Optimus Capital Management, the trade deficit in the first four months of fiscal year 2026 (July-October) stood at $12.6 billion, up 38% year-on-year.

In September, Pakistan recorded a six-month high trade deficit as imports outstripped weak exports by $3.34 billion.

What is the impact of a trade deficit?

The gap between imports and exports has raised concerns about the country’s fragile external position, especially as Pakistan grapples with inflationary pressures, exchange rate volatility, and structural reforms under an ongoing IMF-supported program.

The imbalance highlights structural weaknesses in exports and persistent import demand, keeping pressure on Pakistan’s external account despite earlier stabilization measures.

The widening trade gap is expected to weigh on the current account, which had briefly shown improvement on the back of remittance inflows.

The deficit is expected to widen further in the coming months as the country will have to import food items to make up for the damage to crops due to floods.

According to estimates, Pakistan’s current account deficit is projected to widen by approximately $1.93 billion in FY26.