Pakistan Trade Deficit Widens to $3.88 Billion in OctoberBusiness

Exports rose by only 2.8 per cent to $2.93 billion in October, from $2.85 billion a year earlier. Imports, by contrast, increased 11.8 per cent to $6.81 billion, from $6.09 billion in October 2025. The gap between the two therefore widened by more than $600 million in a single month compared with a year earlier.

On a month-on-month basis, the deficit also increased, rising 10.3 per cent from $3.515 billion in September. The figures suggest that the improvement seen in some earlier months has not been sustained, and that import demand has picked up again.

A wider gap over four months

The pressure is not limited to October alone. During the first four months of the current fiscal year, from July to October, the trade deficit expanded 15.97 per cent to $14.63 billion, from $12.61 billion in the corresponding period of last year.

Exports during July-October rose 8.5 per cent to $11.34 billion, while imports jumped 12.6 per cent to $25.96 billion. Export growth, although positive, has therefore lagged well behind import growth for four consecutive months.

Analysts say the pattern points to a familiar challenge. Higher imports may partly reflect stronger domestic economic activity, but the persistent gap between import and export growth adds to the country’s external financing requirements. Waqas Ghani, head of research at JS Global, was reported as saying that the widening gap increases the financing burden at a time when foreign exchange reserves remain a central concern for policymakers.

Services trade also under strain

The services account added to the pressure in September. Pakistan’s services trade deficit jumped 84.3 per cent to $282.7 million in September 2026, from $153.4 million a year earlier, the bureau said.

Services exports increased 15.35 per cent to $930 million in September, from $806 million last year. Services imports, however, rose faster, increasing 26.4 per cent to $1.21 billion, from $959 million a year earlier.

The combined picture leaves policymakers facing the same question that has dominated economic debate for much of the year: how to lift exports fast enough to keep pace with imports. The government has recently moved to make long-term financing easier for small and medium exporters, including ordering the removal of a condition that businesses export at least 80 per cent of their products to qualify. Officials say the aim is to broaden the export base, but the October figures show how far that base still has to grow before the trade gap begins to narrow in a sustained way.