Pakistan’s Trade Deficit with Neighbors Surges 26.6% to $4.97 Billion

ISLAMABAD: Pakistan’s trade deficit with nine neighboring countries has widened sharply by 26.62 percent, reaching $4.97 billion in the first quarter of the 2026-27 fiscal year, compared to $3.93 billion during the same period last year.

This significant increase is primarily attributed to a contraction in exports to regional markets, particularly due to a complete halt in trade with Afghanistan since October 10, 2025, and reduced shipments to Bangladesh. The suspension of trade with Afghanistan has notably impacted overall export performance.

Moreover, imports from China surged during the July-September quarter, exacerbating the trade imbalance. The bilateral deficit with China alone increased by $858.808 million, accounting for approximately 82.18 percent of the total increase in the combined deficit with the nine countries. While exports to China saw a slight uptick, exports to Nepal also grew marginally, though the dollar value remains negligible.

Looking ahead, stakeholders are urged to address the declining export trends and explore avenues to revitalize trade relations, particularly with Afghanistan and Bangladesh. The government may need to reassess its trade strategies to mitigate the widening deficit and enhance economic stability.