Imports surge 26% while exports decline 10%, widening external trade gap to highest monthly level in four years
ISLAMABAD: Pakistan’s trade deficit widened sharply to $4.5 billion in June 2026, marking the highest monthly shortfall in four years as imports surged while exports declined, according to the latest trade data.
The country’s imports increased 26% year-on-year to $6.7 billion during the month, while exports fell 10% to $2.2 billion, resulting in a significant deterioration in the external trade balance.
The monthly trade deficit expanded by 57% compared with June 2025 and rose 64% from May 2026, highlighting growing pressure on Pakistan’s external sector.
Imports Rise While Exports Decline
The sharp increase in imports was driven by stronger domestic demand and higher purchases of industrial raw materials, machinery and other essential goods.
At the same time, export earnings weakened, reflecting softer overseas demand and lower shipments, which widened the gap between imports and exports.
The June figures represent the largest monthly trade deficit recorded in the past four years.
External Sector Faces Fresh Pressure
Analysts said the sharp widening in the trade gap could place additional pressure on Pakistan’s current account if import growth continues to outpace exports in the coming months.
However, they noted that robust workers’ remittances and continued foreign capital inflows are expected to provide some support to the country’s external financing position.
The latest figures underscore the importance of maintaining export competitiveness while managing rising import demand.
Outlook
Economists believe sustained export growth and greater product diversification will be essential to improving Pakistan’s external balance and reducing dependence on imported goods.
While stronger economic activity has supported higher imports, policymakers are expected to focus on measures that boost exports, attract investment and strengthen the country’s foreign exchange position in the new fiscal year.