Pakistan’s Trade Deficit Balloons to $12.6 Billion in Four Months as Imports Hit 43-Month High

Pakistan’s trade gap has surged to a staggering $12.6 billion in the first four months of FY2025-26, widening by a massive $3.5 billion (38%) year-on-year, after October imports soared to $6.1 billion—the highest level since March 2022.

The Pakistan Bureau of Statistics (PBS) revealed the alarming numbers Tuesday, showing imports for July-October rocketed 15.1% to $23 billion, while exports slumped 4% to $10.5 billion—meaning every dollar earned through exports now buys just 45 cents of imports.

October alone painted an even grimmer picture:

• Imports: $6.1 billion ↑ 20% YoY (biggest monthly jump in over 3½ years)
• Exports: $2.8 billion ↓ 4.5% YoY (third straight monthly decline)
• Monthly trade deficit: $3.2 billion ↑ 56% YoY

The $3.5 billion extra deficit in just four months equals half the entire $7 billion IMF Extended Fund Facility Pakistan is sweating to secure over three years.

Driving the import tsunami: a 43% surge in non-dutiable goods after budget duty cuts, combined with IMF-World Bank-mandated trade liberalization that slashed tariffs by the first 10% tranche in July—part of a five-year plan to cut import taxes 52%.

Prime Minister Shehbaz Sharif last month formed eight emergency task forces to halt the “complete collapse” of exports, warning that without urgent tax-energy rationalization and industrial revival, Pakistan risks choking on its own import bill.

Unless exports rebound fast, economists warn the government may be forced to slam the brakes on liberalization—risking IMF wrath and fresh balance-of-payments chaos.

Pakistan now faces a stark choice: keep opening the import floodgates and pray exports wake up, or hit reverse and protect dwindling forex reserves.

The clock is ticking.

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