Pakistan's trade deficit swells to an all-time high by growing more than 25% year-over-year to reach $3.95 billion in July 2026, as per statistics released by the government on Wednesday. Payments on imports rose almost 18%, whereas there was an improvement of 10% on the exports front.
The deficit had stood at $3.15 billion in July 2025, according to the Pakistan Bureau of Statistics (PBS), meaning this year's figure represents a significant year-on-year jump. Commenting on the data, Ismail Iqbal Securities' Head of Research Saad Hanif said the underlying import appetite has not genuinely cooled, adding that the broader reopening of the economy also kept import volumes elevated during the month.
The import bill increased by 18% to $6.89 billion in July, against $5.84 billion in July last year, as per PBS statistics. As stated by Hanif, the main reason for high import payments was an increase in the prices of energy as a consequence of the geopolitical unrest in the Middle East region. "Petroleum oil and RLNG have risen around 40-50 percent in the month of July 2026 against the previous July," said Hanif.
Pakistan continues to be an energy importing country, with energy traditionally forming 20% to 25% of its total imports. Thus, any fluctuations in energy prices have a great impact on Pakistan’s trade balance, as can be seen from the data of July. "Apart from energy imports, there is also an increase in the imports of automobiles and machinery used in industries and agriculture," Hanif noted.
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In relation to exports, revenue jumped 9.54% to $2.94 billion in July 2026 from $2.68 billion in July 2025, according to PBS. “The main reason for an increase in the revenue generated by exports is because of the recovery of food products, especially rice, exports,” said Mr. Hanif. It should be noted that textile exports still hold the position of the major type of exports for Pakistan, making up 55%-60% of export revenues.
Based on the information from Hanif, the release of the statistics of imports and exports later in the month will provide insight into which products have the largest contribution in terms of the increase in export revenues in July 2026.
Although there has been a significant increase from last year, the story is quite the opposite on a month-to-month comparison. The deficit decreased by over 15%, coming down to more than $4.66 billion for July 2026 from June 2026, owing to a revival in exports, which increased by an incredible 31% MoM, as per PBS and Ministry of Finance.
The country’s export revenue rose to $2.94 billion in July 2026 from $2.24 billion in June 2026, as reported by PBS figures. As per the Ministry of Finance, this was among the best monthly export performances seen in recent years, whereas imports stayed almost the same at $6.89 billion in July 2026 as compared to June 2026, declining just 0.17%.
According to the Ministry of Finance, it is a welcome early indicator that the budget will give emphasis on the issues of export promotion, competitiveness, reduced cost of doing business, and private sector growth. "The figures from July indicate a boost in momentum in the external sector and it makes for a good start to FY27, and underscores Pakistan's shift towards being a more competitive, export-oriented economy," said the ministry, while interpreting the monthly figures as a positive development despite the rising deficit figure from last year.