Pakistan’s July trade deficit widens 22.6% as imports outpace exports

Pakistan’s merchandise trade deficit widened 22.6% year-on-year to USD 3.922 billion in July 2026 as imports grew significantly faster than exports at the start of the new fiscal year, according to data released by the Pakistan Bureau of Statistics.

The trade deficit rose from USD 3.199 billion in July 2025, with imports increasing 16.84% to USD 6.889 billion from USD 5.896 billion a year earlier.

Exports also recorded growth, rising 10.01% year-on-year to USD 2.967 billion in July 2026 from USD 2.697 billion in the same month last year.

The wider trade gap reflects the faster pace of import growth, with the increase in imports outweighing gains in exports and adding pressure to Pakistan’s external account.

Textile exports, Pakistan’s largest export category, rose 9.11% year-on-year to USD 1.833 billion in July, up from USD 1.680 billion in the corresponding month of 2025. The increase points to continued resilience in the country’s key export sector despite challenging global market conditions.

Economists said stronger domestic demand and higher imports of industrial raw materials, machinery and energy products could be contributing to the rise in imports as economic activity recovers.

They noted that sustained export growth, particularly in value-added textiles, will be important for containing external sector pressures in the coming months.

A persistently wider trade deficit could put additional pressure on Pakistan’s current account, although strong workers’ remittances and expected financial inflows may help offset some of the impact.

The July data mark the first monthly trade figures for fiscal year 2026-27, with policymakers expected to closely monitor the pace of import growth and export performance as they seek to maintain external sector stability.