ISLAMABAD: Pakistan’s trade deficit with the Middle East narrowed by nearly three per cent during the first eight months of 2025-26, as the ongoing conflict in the region begins to weigh on commercial activity and bilateral engagement.

The full impact on Pakistan’s exports is yet to unfold. At the same time, imports, which account for the bulk of petroleum inflows from the region, are expected to decline more sharply once trade data for March are compiled.

In absolute terms, the trade deficit with the Middle East decelerated to $9.047 billion in July-February FY26 from $9.299bn a year ago, according to data compiled by the State Bank of Pakistan.

In its March report, the Planning Commission of Pakistan has already warned the government of potential economic repercussions of the Gulf crisis, including higher energy costs, pressure on remittance inflows, and possible disruptions to exports and financial stability.

In FY25, the trade gap with the region widened 7.37pc to $13.974bn from $13.014bn in FY24.

Planning Commission alerts to economic fallout of ongoing Middle East crisis

Exports to the Middle East fell 1.07pc to $2.122bn in 8MFY26 from $2.145bn over the corresponding months of last year. There are predictions that exports will fall further if the war continues.

In FY25, exports to the region fell 1.52pc to $3.107bn from $3.155bn in the preceding year.

At the same time, imports, mainly petroleum products, slipped 2.41pc to $11.169bn in 8MFY26 from $11.444bn a year ago. In FY25, imports rose 5.64pc to $17.081bn from $16.169bn in FY24.

The demand for Pakistani products dropped in the United Arab Emirates (UAE) during the period under review.

Exports to Saudi Arabia fell 5.53pc to $463.71m in July-February FY26 from $490.87m a year ago. Imports from the kingdom increased by 5.66pc to $2.61bn from $2.47bn.

Exports to the UAE grew 0.71pc to $1.43bn in 8MFY26 from $1.42bn over the last year. Pakistan’s top export products to the UAE include rice, bovine carcasses, men’s and boys’ cotton ensembles, guavas and mangoes.

Imports from the UAE increased by 4.59pc to $5.46bn from $5.22bn over the corresponding months of last year.

Exports to Bahrain fell 4.88pc to $32.55m in 8MFY26 from $34.22m a year ago. Imports dipped 4.68pc to $148.46m from $155.75m.

Exports to Qatar fell 13.12pc to $69.84m in 8MFY26 from $80.39m in the corresponding month last year. Imports fell 16.59pc to $1.96bn from $2.35bn over the same period last year.

Exports to Kuwait surged 21.99pc to $94.19m in 8MFY26 from $77.21m a year ago. However, imports plunged 21pc to $979.46m from $1.24bn.

Exports to Jordan fell to $31.71m in 8MFY26 from $42.84m over the last year. However, imports rose to $12.24m from $9.17m.

Published in Dawn, March 24th, 2026