ISLAMABAD: Pakistan’s merchandise exports slipped back into negative territory in February, reversing a brief recovery seen a month earlier and raising fresh concerns about the outlook for overseas shipments amid escalating tensions in the Middle East.

The setback follows five consecutive months of contraction, with exports showing a modest rise in January, offering cautious optimism that a recovery might be taking shape. That momentum, however, proved short-lived as February data signalled renewed pressure on the external sector.

Trade analysts warn that the unfolding crisis in the Middle East could weigh further on export performance, particularly by disrupting trade routes, dampening demand in key regional markets, and adding uncertainty to global supply chains.

With geopolitical risks mounting, exporters now face heightened volatility in the months ahead. In absolute terms, export proceeds fell 8.76pc to $2.27 billion in February from $2.49bn a year ago, the Pakistan Bureau of Statistics (PBS) said on Tuesday.

Trade gap widens by one-fourth to $25.04bn in 8MFY26

On a month-on-month basis, export proceeds dipped by 25.63pc in February. Negative growth in exports has continued since August of the current fiscal year, except in July, when proceeds grew by 16.43pc year on year. Export earnings posted negative growth, with proceeds declining by 20.41pc in December. This follows a 14.54pc drop in November, 4.46pc in October, 3.88pc in September, and 12.49pc in August, reflecting persistent pressures on the country’s external trade performance. However, in January, exports posted a modest 3.3pc growth.

In the first eight months (July-February), export proceeds recorded negative growth of 7.30pc, falling to $20.46bn from $22.07bn in the corresponding period last year. Last month, the government announced several measures, including a reduction in energy rates, to minimise pressure on the country’s trade performance.

Currently, the exporters are grappling with subdued global markets and the high cost of doing business in the country. The textile exporters have already complained about contractions owing to the high cost of doing business. In FY25, export proceeds rose 4.67pc to $32.106bn against $30.675bn in the preceding year.

Trade deficit

According to the PBS data, imports fell 1.68pc to $5.25bn in February from $5.34bn over the corresponding month of last year. Month-on-month, imports decreased 9.51pc.

In the first eight months of 2025-26, the import bill grew by 8.06pc to $45.51bn, up from $42.11bn in the corresponding period last year. The import rose 6.57pc to $58.38bn in July-January FY25 from $54.78bn over the previous year.

The trade deficit narrowed 4.63pc to $2.98bn in February from $2.85bn over the corresponding month of last year. The trade deficit swelled 24.98pc to $25.04bn in July-February 2025-26, up from $20.04bn over the corresponding period last year. The trade deficit for FY25 widened by 9pc to $26.27bn, up from $24.11bn in the preceding year.

Published in Dawn, March 4th, 2026