ISLAMABAD: Pakistan’s trade deficit with the Middle East widened by 7.37 per cent to $13.974 billion in FY25 from $13.014bn a year ago, primarily due to a sharp increase in petroleum imports.

According to data compiled by the State Bank of Pakistan, the growing deficit reflects the country’s heavy reliance on energy imports from the region, while exports have shown only marginal gains to a limited number of Middle Eastern markets. Crude oil imports rose 15pc in quantity in FY25, contributing to the higher trade imbalance.

In contrast, the previous fiscal year had witnessed an improvement, with the trade gap narrowing by 20.47pc to $13.014bn in FY24 from $16.365bn in FY23, mainly due to a decline in petroleum imports amid reduced domestic consumption triggered by higher fuel prices.

Pakistan’s exports to the Middle East declined 1.52pc to $3.107bn in FY25 from $3.155bn in the preceding year. In FY24, exports to the region increased by 35.23pc comapred to $2.33bn in FY23.

On the import side, goods from the Middle East rose 5.64pc to $17.081bn in FY25, up from $16.169bn a year earlier. This followed a decline of 13.53pc in FY24, when imports fell to $16.16bn from $18.69bn in FY23.

To address the growing imbalance, Pakistan has recently signed a free trade agreement with the Gulf Cooperation Council (GCC) states, aiming to boost exports and diversify trade relations.

Among individual countries, exports to Saudi Arabia slipped 0.84pc to $704.32m in FY25 from $710.29m a year earlier. In FY24, exports to the kingdom had risen sharply by 40.98pc. Imports from Saudi Arabia, however, dropped 16.6pc to $3.746bn in FY25, compared to $4.492bn last year.

Trade with the United Arab Emirates (UAE) showed an upward trend. Exports increased 1.87pc to $2.121bn in FY25 from $2.082bn last year. In FY24, exports to the UAE had surged 41.15pc, largely due to increased shipments to Dubai. Pakistan’s key export items to the UAE include rice, bovine meat, cotton garments, mangoes, and guavas. Imports from the UAE rose 25.75pc to $7.958bn in FY25 from $6.328bn a year ago.

Exports to Bahrain declined 23.36pc to $52.63m in FY25 from $68.68m, while imports also dropped 7.37pc to $201.30m from $217.32m.

Similarly, exports to Qatar shrank 28.65pc to $116.67m in FY25, compared to $163.54m in FY24. Imports from Qatar, however, grew 4.54pc to $3.499bn from $3.347bn.

Exports to Kuwait also declined, falling 13.87pc to $112.57m in FY25 from $130.71m. Imports from Kuwait slipped 6pc to $1.677bn from $1.785bn over the same period.

Published in Dawn, July 22nd, 2025