Pakistan’s Trade Deficit with 9 Neighboring Countries Reaches $6.22B

DID Press: Pakistan’s trade deficit with nine neighboring countries rose by 39.33 percent in the first five months of fiscal year 2025–2026, reaching $6.221 billion, according to official data. The figure stood at $4.465 billion during the same period last year.

Pakistani media reported the sharp increase in the trade deficit is largely the result of an overall decline in Pakistan’s exports to regional countries, driven mainly by reduced exports to China and, subsequently, Afghanistan. Pakistan has suspended all forms of trade, including exports, with Afghanistan since October 10.

Data released by the State Bank of Pakistan show that although exports to India recorded a slight increase, their overall value remained negligible. Exports to Bangladesh and Sri Lanka also registered negative growth during the period under review.

The total value of Pakistan’s exports to nine countries—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives—fell by 17.05 percent to $1.635 billion between July and November of fiscal year 2026, compared with $1.971 billion in the same period last year.

Exports to Afghanistan saw a particularly sharp decline of 94.72 percent, falling from $408.585 million last year to $210.556 million in the first five months of fiscal year 2026. Imports from Afghanistan during the same period amounted to $8.527 million, marking a 34.46 percent decrease compared to fiscal year 2025.

Analysts say the continuation of trade restrictions, weakening regional demand, and declining exports to key markets—especially China and Afghanistan—are the main factors behind the widening trade deficit between Pakistan and its neighboring countries.