ISLAMABAD: Pakistan’s trade deficit with the Middle East widened by 9.75 per cent to $9.349 billion in the first eight months of 2024-25 compared to $8.518bn a year ago, primarily driven by increased petroleum imports.
The growing trade deficit raises concerns among decision-makers, mainly due to the rising influx of petroleum products. Meanwhile, export growth to select countries in the region remains minimal, according to data compiled by the State Bank of Pakistan.
Petroleum consumption has risen in the current fiscal year because the crude oil import surged 20.29pc in quantity in the first eight months of the FY25 from a year ago.
In FY24, the trade 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 3.56pc to $2.095bn in July-February from $2.023bn 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 also saw an increase of 8.56pc to $11.444 bn in July-February from $10.541bn 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 10.59pc to $489.44m in July-February from $442.54m over the 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 19.54pc to $2.47bn against $3.07bn 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 the UAE increased 5.84pc to $1.414bn in July-February from $1.336bn 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-February, the imports from the UAE also rose 30.11pc to $5.220bn from $4.012bn over the previous year.
Exports to Bahrain declined by 27.79pc to $34.21m in 8MFY25 from $47.38m in the corresponding period last year. The imports from Bahrain increased 27.32pc to $155.75m in 8MFY25 from $122.33m.
Exports to Kuwait saw a decline of 10.42pc to $77.002m in 8MFY25 from $85.953m over the previous year. However, imports increased by 2.22pc to $1.244bn from $1.217bn.Pakistan’s exports to Qatar fell 28.31pc to $80.38m in 8MFY25 from $112.118m. The imports stood at $2.355bn against $2.120bn over the last year, indicating an increase of 11.08pc.
Published in Dawn, April 15th, 2025
