ISLAMABAD: Pakistan’s merchandise exports declined by 14.4 per cent in March, marking a second consecutive monthly contraction as disruptions linked to the Middle East crisis weighed on external trade.

The export sector had already been under pressure in the months leading up to February, but the situation has worsened due to the conflict. The disruptions in the Strait of Hormuz have pushed up shipping costs for exporters and disrupted supply chains.

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

In absolute terms, export proceeds fell 14.4pc to $2.26 billion in March from $2.65bn a year ago, the Pakistan Bureau of Statistics (PBS) said on Thursday. On a month-on-month basis, export proceeds dipped by 0.55pc in March.

Imports decline 5.4pc; trade deficit widens to $2.73bn in March

Negative growth in exports has continued since August of the current fiscal year, except in July, when proceeds grew by 16.4pc year-on-year. Export earnings posted negative growth, with proceeds declining by 20.4pc 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 modest 3.3pc growth, but returned to negative growth of 8.76pc in February. In the nine months (July-March), export proceeds recorded a negative growth of 8pc, falling to $22.73bn from $24.72bn in the corresponding period last year.

Two months ago, 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.

In FY25, export proceeds rose 4.7pc to $32.1bn against $30.68bn in the preceding year.

Trade deficit

According to PBS data, imports fell 5.4pc to $4.99bn in March from $5.28bn in the same month last year, while on a month-on-month basis imports declined by 5.57pc.

In the first nine months of FY26, the import bill increased by 6.64pc to $50.54bn from $47.38bn in the corresponding period last year. Imports rose 6.57pc to $58.38bn in July-January FY25 compared to $54.78bn a year earlier.

The trade deficit widened by 3.7pc to $2.73bn in March from $2.63bn in the same month last year. In July-March FY26, the deficit surged by 22.65pc to $27.8bn from $22.67bn in the corresponding period last year.

For FY25, the trade deficit increased by 9pc to $26.27bn compared to $24.11bn in the previous year.

Published in Dawn, April 3rd, 2026