By Moaaz Manzoor

Pakistan’s trade deficit widened sharply by 25.27% to $25.10 billion during July-February FY2025-26, as exports declined and imports increased, according to the Trade Development Authority of Pakistan’s (TDAP) Monthly Trade Report for February 2026.

The country’s exports during the eight-month period stood at $20.47 billion, down 7.27% compared to $22.07 billion in the same period of last fiscal year. In contrast, imports rose to $45.57 billion from $42.11 billion, registering an increase of 8.21%, the report shows.

The widening gap between exports and imports led to a significant deterioration in the trade balance during the period under review. The data indicates that while export earnings declined, import spending continued to rise, contributing to the expansion in the deficit.

On a monthly basis, exports in February FY2025-26 were recorded at $2.28 billion, compared to $2.49 billion in February FY2024-25, reflecting a decline of 8.51%. Imports during the month stood at $5.32 billion, slightly lower than $5.34 billion in the same month last year, showing a marginal decrease of 0.39%.

As a result, the trade deficit for February reached $3.04 billion, compared to $2.85 billion in February last year, indicating an increase of 6.70% on a year-on-year basis. The figures show that despite a slight easing in imports during the month, the decline in exports contributed to a wider monthly deficit.

The TDAP report highlights that cumulative trade performance during July-February FY2025-26 reflects contrasting trends between exports and imports over the period. While exports contracted, imports posted a noticeable increase, leading to a widening imbalance in the country’s external trade position compared to the same period of last year.

In absolute terms, the trade deficit has increased by over $5 billion compared to July-February FY2024-25, when it stood at $20.04 billion. This rise underscores the growing gap between the country’s external earnings and spending on goods over the current fiscal year.

In addition to goods trade, the report also presents data on services trade, which showed an increase during the period under review. Services exports in January FY2025-26 were recorded at $885.09 million, compared to $675.03 million in January FY2024-25, reflecting a growth of 31.12%. On a cumulative basis, services exports rose to $5.66 billion during July-January FY2025-26 from $4.76 billion in the corresponding period last year, registering an increase of 18.78%.

Services imports also increased during the same period. In January FY2025-26, services imports stood at $1.19 billion, compared to $965.08 million in January FY2024-25, showing a rise of 23.29%. Cumulatively, services imports reached $7.73 billion during July-January FY2025-26, up from $6.58 billion in the same period last year, reflecting an increase of 17.46%.

As a result, the services trade deficit widened to $2.07 billion during July-January FY2025-26, compared to $1.82 billion in the corresponding period of last fiscal year, indicating an increase of 14.00%.

According to the TDAP report, the trade figures are based on provisional data compiled from multiple official sources, including the Pakistan Bureau of Statistics (PBS), Web-Based One Customs (WeBOC), and Pakistan Revenue Automation Limited (PRAL), and are subject to revision.

Credit: INP-WealthPk