BMPP leader warns rising trade deficit, declining exports and Middle East tensions could further pressure Pakistan’s external sector
Karachi, July 20, 2026: Khurram Ijaz, General Secretary of the Businessmen Panel Progressive (BMPP) and former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed serious concern over Pakistan’s external sector after the country recorded a current account deficit (CAD) in fiscal year 2025-26, warning that the latest figures point to weakening economic fundamentals and could worsen amid escalating tensions in the Middle East.
Referring to the latest statistics released by the State Bank of Pakistan (SBP), Khurram Ijaz said Pakistan posted a current account deficit of $139 million in FY2025-26, compared with a current account surplus of $1.838 billion in the previous fiscal year.
He noted that the situation became more alarming in June 2026, when the country recorded a current account deficit of $649 million, compared with a surplus of $220 million in June 2025 and a surplus of $500 million in May 2026.
Khurram Ijaz attributed the deterioration in the external account primarily to the widening trade deficit and a slowdown in workers’ remittances during the closing month of the fiscal year.
He said Pakistan’s trade deficit expanded by 21.57 percent to $39.47 billion during FY2025-26, compared with $32.47 billion in the preceding fiscal year. The widening gap was driven by a 6 percent decline in exports and an around 8 percent increase in imports, reflecting mounting pressure on the country’s external sector.
While welcoming the overall growth in workers’ remittances, which rose to $41.58 billion in FY2025-26 from $38.30 billion a year earlier, Khurram Ijaz cautioned that the impact of regional tensions had already started affecting inflows. He pointed out that remittances fell to $3.47 billion in June 2026, compared with $4.25 billion in May 2026.
“The latest current account figures are a warning sign that should not be ignored,” Khurram Ijaz said. “The government must act swiftly to prevent further deterioration in the external sector, particularly at a time when geopolitical tensions are creating fresh uncertainties for global trade and financial flows.”
He warned that the renewed escalation in the Middle East could have far-reaching consequences for Pakistan’s economy if major shipping routes in the Gulf were disrupted.
“Pakistan’s exports have already started declining. If the regional conflict prolongs, the situation could become critical because a significant portion of our exports depends on imported raw materials. At the same time, Pakistan remains heavily dependent on imported petroleum products, making uninterrupted fuel supplies essential for economic stability,” he added.
Khurram Ijaz urged Prime Minister Shehbaz Sharif to immediately formulate a comprehensive home-grown strategy to safeguard Pakistan’s external sector against emerging global risks.
He also called on the government to declare an export emergency and introduce a robust package of incentives for export-oriented industries, including tax relief, lower electricity and gas tariffs, and regulatory facilitation to enhance competitiveness in international markets.
Furthermore, he stressed the need for Pakistan’s commercial counsellors stationed abroad to actively identify and develop new export destinations so that any losses arising from disruptions in Middle Eastern markets could be offset through diversification.
“Pakistan cannot afford complacency in the current global environment. Timely and decisive policy measures are essential to strengthen exports, stabilise the external account and protect the country’s economic outlook,” Khurram Ijaz concluded.