Pakistan Trade Deficit: $39.47 Billion — Why Imports Dwarf Exports
Pakistan’s trade deficit hit $39.47B in FY2025–26 — imports ($69.60B) more than double exports ($30.13B). This guide explains the deficit: what Pakistan imports, why, and what would close the gap.
Quick answer: Pakistan’s merchandise trade deficit was $39.47B in FY2025–26 — up 21.57%. Exports: $30.13B (−5.97%); imports: $69.60B (+7.89%). The gap is structural: energy, machinery and raw materials must be imported; exports are narrow and price-sensitive.
The FY26 numbers
Per TDAP (via SDPI): merchandise exports $30.13B (−5.97%), imports $69.60B (+7.89%), deficit $39.47B (+21.57%). July 2026: exports $2.96B (+10.4%) but imports $6.94B (+18.9%) — the gap widening even in a good export month. Combined goods + services exports were ~$40.9B (services $10B cushioned the merchandise fall).
What Pakistan imports
- Petroleum: the biggest bill — crude and refined products (July 2026: $1.276B, −5.2%).
- Machinery: $1.31B in July 2026 (+41.3%) — industrial and power equipment.
- Raw materials: cotton, chemicals, steel — feeding the export industries themselves.
- Food: $805.5M in July 2026 (+8.12%) — palm oil, pulses, tea.
- Transport equipment: $422.3M in July (+39.7%).
Why the gap persists
Three structural reasons. Energy dependence: Pakistan imports most of its oil and gas — every growth spurt lifts the import bill. Narrow exports: 63% of exports are textiles+leather; when global prices dip (rice −33% in FY26), there’s no cushion. Import-dependent industry: even exporters import their inputs — cotton for yarn, chemicals for pharma, CKD kits for autos.
What would close it
Economists’ standard prescription (see the SDPI analysis): diversify exports (IT’s $4.6B shows the way), add value (garments over yarn), substitute imports (refining, local manufacturing — “Make in Pakistan”), and energy reform (cheaper power cuts both the import bill and exporters’ costs). Remittances — Pakistan’s other foreign-exchange pillar — finance the gap meanwhile. The export side: major exports hub.
Trade deficit: FAQs
What is Pakistan’s trade deficit?
$39.47B in FY2025–26 (merchandise) — up 21.57% year-on-year.
Why does Pakistan have a trade deficit?
Energy and machinery must be imported; exports are narrow (textiles, rice) and price-sensitive.
What does Pakistan import most?
Petroleum, machinery, raw materials (cotton, chemicals, steel) and food (palm oil, pulses, tea).
How is the deficit financed?
Remittances, services exports ($10B), borrowing and foreign investment.
