ISLAMABAD: Pakistan’s merchandise exports recorded a contraction of 5.61 per cent during the first 11 months of 2025-26, while the trade deficit widened amid a rise in imports and relatively modest export performance.

The decline has persisted in recent months, with exports recording negative growth in February and March, followed by a brief recovery in April. Despite this short-lived improvement, exporters remain cautious and do not expect a sustained rebound in earnings in the near term.

The export proceeds reached $27.91 billion in 11MFY26, compared with $29.56bn in the corresponding months of last year, the Pakistan Bureau of Statistics said on Wednesday.

In May, however, exports grew 1.26pc to $2.71bn, up from $2.67bn in the corresponding month last year. On a month-on-month basis, export proceeds increased by 9.59pc in May.

Trade deficit widens 17.48pc to $34.76bn

Negative export growth has continued since August of the current fiscal year, except in July, when exports 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 modest growth of 3.3pc, but returned to negative growth of 8.76pc in February and 14.4pc in March. In April, exports surged 14.03pc year-on-year.

The export sector had already been under pressure since February due to the conflict in the Middle East. The disruptions in the Strait of Hormuz have pushed up shipping costs for exporters and disrupted supply chains.

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

In FY25, export proceeds rose 4.67pc to $32.106bn against $30.675bn in FY24.

Trade deficit

According to the PBS data, imports dipped 6.63pc to $5.28bn in May, down from $5.66bn in the corresponding month last year. Month-on-month, imports decreased 21.45pc.

In 11MFY26, the import bill grew by 5.94pc to $62.66bn, up from $59.15bn in the corresponding period last year.

The import rose 6.57pc to $58.38bn in July-January FY25 from $54.78bn a year ago.

The trade deficit dipped 13.68pc to $2.58bn in May from $2.99bn over the corresponding month of last year.

The trade deficit swelled 17.48pc to $34.76bn in July-May 2025-26, up from $29.58bn 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, June 4th, 2026