ISLAMABAD: Pakistan’s trade deficit with the Middle East increased 5.62 per cent to $7.984 billion in the first seven months of FY25 from $7.559bn in the same period last year due to higher petroleum imports.

The increasing trade deficit is a cause for concern among policymakers, primarily due to the rising influx of petroleum products from the region. In contrast, exports are experiencing only minimal growth to a limited number of countries in the area, according to data compiled by the State Bank of Pakistan.

Petroleum consumption has risen in the current fiscal year because crude oil imports surged 18.20pc in quantity in the first seven months of the FY25 from a year ago.

In FY24, the imbalance with the Middle East narrowed by 20.47pc to $13.014bn from $16.365bn over the preceding year, mainly due to lower petroleum imports amid falling consumption owing to rising local prices.

Exports to the Middle East rose 4.92pc to $1.856bn in July-January from $1.769bn over the same period last year. In FY24, the exports to the region grew 35.23pc to $3.155bn compared to $2.33bn in the preceding year.

At the same time, Pakistan’s imports from the Middle East grew 5.48pc to $9.840bn in 7MFY25 from $9.328bn over the same period last year. In FY24, the imports declined 13.53pc to $16.16bn compared to $18.69bn in the same period the preceding year.

Pakistan has recently signed a free trade agreement with the Gulf Coope­ration Council (GCC) states to minimise its trade imbalance with the region.

The demand for Pakistani products surged in the United Arab Emirates (UAE), Saudi Arabia and Qatar during the period under review.

Exports to Saudi Arabia rose 11.04pc to $428.83m in July-January from $386.21m over the same period last year. In FY24, exports to Saudi Arabia rose 40.98pc to $710.335m from $503.851m in FY23. The imports from the kingdom saw a decline of 22pc to $2.171bn against $2.785bn in the same period last year.

In FY24, imports from Saudi Arabia declined by 0.01pc to $4.49bn against $4.50bn in the preceding year.

Exports to UAE increased 7.53pc to $1.257bn in July-January from $1.169bn over the last year. In FY24, exports to the UAE surged 41.15pc to $2.082bn from $1.475bn in FY23, primarily due to a significant rise in exports to Dubai.

Pakistan’s top export products to the UAE include rice, bovine carcasses, men’s and boys’ cotton ensembles, guavas and mangoes. In July-January, the imports from UAE also witnessed an increase of 26.21pc to $4.512bn from $3.575bn over the last year month.

Exports to Bahrain declined by 28.73pc to $30.06m in 7MFY25 from $42.18m in the corresponding period last year. The imports from Bahrain declined 3.33pc to $98.57m in 7MFY25 from $101.97m.

Pakistan’s exports to Qatar saw a negative growth of 26.50pc to $71.52m in the first seven months of the current fiscal year against $97.31m over the corresponding months of last year. The import from Qatar stood at $2.052bn during the first seven months of the current fiscal year from $1.859bn over the last year, indicating an increase of 10.38pc.

Published in Dawn, February 23rd, 2025