By Moaaz Manzoor

Pakistan’s trade deficit narrowed by 9.47% month-on-month in March 2026 as imports declined sharply, while exports posted a slight decrease, according to the data released by the Pakistan Bureau of Statistics (PBS).

The trade deficit stood at $2.73 billion in March, down from $3.01 billion in February, reflecting an improvement in the country’s external balance. The contraction was primarily driven by a significant drop in imports, which more than offset the marginal decline in exports.

According to the PBS data, exports were recorded at $2.26 billion (Rs632.5 billion) in March, compared to $2.28 billion (Rs636.6 billion) in February, showing a slight decline of 0.5% on a month-on-month basis. The relatively stable export performance indicates limited improvement in external demand conditions.

Imports, on the other hand, declined more sharply to $4.99 billion (Rs1.39 trillion) in March from $5.29 billion (Rs1.48 trillion) in February, registering a decrease of 5.6% month-on-month. The reduction in import payments played a key role in narrowing the trade gap, suggesting some easing in domestic demand or import compression.

On a year-on-year basis, exports showed a notable contraction. Exports declined 14.4% year-on-year from $2.65 billion in March 2025 to $2.26 billion in March 2026, highlighting persistent challenges in sustaining export growth. Imports also declined on an annual basis, though at a slower pace, falling 5.4% year-on-year from $5.28 billion to $4.99 billion, indicating partial moderation in import demand.

Despite the monthly improvement, the trade deficit widened 3.7% year-on-year, reaching $2.73 billion compared to $2.63 billion in March last year, reflecting the continued imbalance between exports and imports. The cumulative trend for the ongoing fiscal year presents a more concerning picture. During July-March FY2025-26, exports declined to $22.73 billion, down from $24.72 billion in the same period last year, marking a contraction of 8.0%.

In contrast, imports increased to $50.54 billion from $47.39 billion, a 6.6% rise, further widening the trade imbalance. As a result, the cumulative trade deficit expanded significantly by 22.6%, reaching $27.81 billion during the nine months, compared to $22.67 billion in the corresponding period of last year.

In rupee terms, the deficit stood at Rs7.83 trillion, underscoring the scale of external sector pressure on the economy. The data suggests that while the improvement in March was largely driven by lower imports, the broader trend remains challenging, with declining exports and rising imports continuing to weigh on Pakistan’s external balance.

Credit: INP-WealthPk