Pakistan’s trade deficit narrowed by 14% year-on-year and 39% month-on-month in May 2026
The country recorded a trade deficit of $2.58 billion in May, compared with $2.99 billion a year earlier and $4.26 billion in April 2026
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
Pakistan’s trade deficit narrowed by 14% year-on-year and 39% month-on-month in May 2026, driven by a sharp decline in imports, according to provisional merchandise trade data released by the Pakistan Bureau of Statistics (PBS).
The country recorded a trade deficit of $2.58 billion in May, compared with $2.99 billion a year earlier and $4.26 billion in April 2026.
Why did Pakistan’s trade deficit narrow in May 2026?
Pakistan’s trade deficit narrowed in May 2026 mainly because imports fell significantly while exports posted modest growth. Imports declined by 21% compared with April and 7% from a year earlier, helping reduce the trade gap despite only a slight increase in exports.
How did Pakistan’s exports perform in May 2026?
Pakistan’s exports rose to $2.70 billion in May, up about 1% from $2.67 billion recorded in the same month last year. On a monthly basis, exports increased nearly 10% from $2.47 billion in April 2026.
The improvement reflects stronger export shipments and external demand during the month. In rupee terms, exports stood at PKR 753.7 billion, compared with PKR 752.4 billion in May 2025 and PKR 688.7 billion in April 2026.
How much did imports decline in May 2026?
Imports fell to $5.28 billion in May, down 7% year-on-year from $5.66 billion. Compared with April 2026, imports dropped 21% from $6.73 billion.
The decline in imports played the biggest role in reducing the monthly trade deficit. Lower import payments also eased pressure on Pakistan’s external account during the month.
What is Pakistan’s trade deficit in FY26 so far?
Despite the improvement in May, Pakistan’s cumulative trade deficit widened during the first eleven months of fiscal year 2025-26. The trade gap reached $34.76 billion during July-May FY26, compared with $29.59 billion in the corresponding period of the previous fiscal year.
Exports during the eleven-month period declined 5% to $27.90 billion from $29.56 billion a year earlier. At the same time, imports increased 7% to $62.66 billion from $59.15 billion.
What does the latest trade data mean for Pakistan’s economy?
The sharp month-on-month decline in imports provided temporary relief for Pakistan’s external sector in May. However, the cumulative trade deficit remains considerably higher than last year’s level.
Analysts say sustained export growth and tighter control of non-essential imports will remain important for improving Pakistan’s balance of payments position in the coming months.
Comments
See what people are discussing