Pakistan Gulf Trade Gap Narrows 26pc in Quarter
Pakistan’s Gulf trade gap narrowed 26.35 per cent to $2.85 billion in the first quarter of 2026-27, down from $3.87 billion a year earlier. Lower imports and moderately higher exports drove the improvement, according to data compiled by the State Bank of Pakistan.
Exports to the seven Gulf partners rose 10.96 per cent to $864.878 million in July-September, up from $779.425 million in the same period last year. Imports from the region fell 20.02 per cent to $3.717 billion, down from $4.648 billion a year earlier.
The steepest import declines came from Kuwait and Qatar. Import payments to Kuwait plunged 97.46 per cent, while payments to Qatar dipped 72.51 per cent. Together, those two countries accounted for $947.923 million of the gross decline in import payments, partly offset by a sharp increase in imports from Oman.
Which Gulf partners drove the trade gap change
The UAE remained Pakistan’s largest Gulf export market by far. It accounted for about 66.21 per cent of Pakistan’s total exports to the seven countries in the quarter, followed by Saudi Arabia at 19.45 per cent. The remaining five countries together accounted for just 14.34 per cent.
Country figures show a mixed picture beneath the headline improvement:
| Partner | Exports change | Imports change |
|---|---|---|
| Saudi Arabia | Up 4.92pc | Down 18.52pc |
| UAE | Up 16.35pc | Down 6.15pc |
| Qatar | Down 22.79pc | Down 72.51pc |
| Kuwait | Down 2.24pc | Down 97.46pc |
| Bahrain | Down 23.07pc | Down 17.31pc |
| Jordan | Up 4.70pc | Down 29.27pc |
| Oman | Up 10.73pc | Up 97.40pc |
Export gains to the UAE were notable in Abu Dhabi, Ajman and Fujairah, while lower petroleum and commodity inflows cut imports from the emirates. The import decline from Saudi Arabia showed a clear dip in Pakistan’s purchases of Saudi goods, especially oil.
Pakistan remained heavily reliant on energy imports, particularly from the UAE and Saudi Arabia, which together accounted for 90 per cent of the total. Qatar, Kuwait, Oman, Jordan and Bahrain stayed secondary contributors despite their export capacity.
Why the Gulf trade gap narrowed
The Middle East conflict has disrupted Pakistan’s trade since March. Exports to most Gulf states are shrinking in some lines, while imports from them are surging in others, worsening Pakistan’s external vulnerability and dependence on Gulf energy and raw materials.
September emerged as the sixth month after the March contraction, suggesting Pakistan’s import flows are highly sensitive to geopolitical developments, particularly in energy corridors. The sharp import drops from Kuwait and Qatar point to a major reversal in energy-related purchases from the region.
For context, FY26 exports to the region fell over 2 per cent to $3.093 billion from $3.152 billion, while imports fell 4 per cent to $16.413 billion from $17.097 billion. The FY27 first quarter therefore breaks the export pattern, with growth returning even as imports fell further.
Karachi port businesses have been told to expect faster facilitation as trade flows shift, Pakistan has sought a 15-year Saudi oil facility to lock in energy supplies, and the finance minister has pointed to a 22-year-low fiscal deficit as the external position improves. Fuel supplies for the winter months are also being lined up as the government plans for November demand.
What the narrower gap means
A smaller deficit eases pressure on the external account, but the cause matters: a gap narrowed by collapsing imports is weaker than one narrowed by export growth. Here both forces helped.
The risk is that the import fall reflects disruption rather than strength: if Gulf energy shipments stay disturbed, the bill could rebound once flows normalise. The export gain, led by the UAE, is the healthier part of the story.
For now, the quarter shows Pakistan buying less from the Gulf and selling more to it. That is a step in the right direction, but one quarter does not make a trend.
By how much did Pakistan’s Gulf trade gap narrow?
The deficit narrowed 26.35 per cent to $2.85 billion in the first quarter of 2026-27, from $3.87 billion a year earlier.
Which country took most of Pakistan’s Gulf exports?
The UAE accounted for about 66.21 per cent of Pakistan’s exports to the seven Gulf partners, followed by Saudi Arabia at 19.45 per cent.
Why did imports from Kuwait and Qatar fall so sharply?
Import payments to Kuwait plunged 97.46 per cent and to Qatar by 72.51 per cent, reflecting a major reversal in energy-related purchases from the region.
Did Pakistan’s Gulf exports rise overall?
Yes, exports to the region rose 10.96 per cent to $864.878 million in July-September, up from $779.425 million a year earlier.
