ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries widened by 26.62 per cent to $4.97 billion during the first quarter of fiscal year 2026-27, compared with $3.93 billion in the corresponding period last year, according to the latest data compiled by the State Bank of Pakistan (SBP).
The widening deficit was driven by declining exports to regional markets and a sharp increase in imports, particularly from China. The suspension of trade with Afghanistan, including exports, since October 10, 2025, has also weighed on Pakistan’s regional trade performance.
Pakistan’s exports to nine neighbouring countries—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives—fell 6.72 per cent to $944.24 million during July-September of FY27, down from $1.01 billion in the same period last year.
In contrast, imports from these countries surged 19.79 per cent to $5.92 billion during the first three months of the current fiscal year, compared with $4.94 billion in the corresponding period of FY26.
China remained Pakistan’s largest trading partner in the region. Imports from China increased 19.76 per cent to $5.82 billion from $4.85 billion a year earlier. Meanwhile, Pakistan’s exports to China rose 17.95 per cent to $663.57 million, compared with $562.56 million in the same period last year.
The growing trade imbalance with China accounted for a significant portion of the overall increase in Pakistan’s deficit with its nine neighbours. The bilateral deficit with China widened by $858.808 million, representing approximately 82.18 per cent of the increase in the combined trade deficit.
Trade with India also showed a notable change, with imports rising 68.90 per cent to $61.74 million from $36.55 million. However, Pakistan recorded no exports to India during the first quarter of FY27.
Meanwhile, exports to Afghanistan plunged 88.34 per cent to $18.86 million, compared with $161.76 million in the previous year’s corresponding period. Imports from Afghanistan dropped 94.40 per cent to $0.25 million from $4.52 million.
Pakistan’s exports to Bangladesh declined 2.96 per cent to $174.77 million from $180.12 million. Imports from Bangladesh also fell 36.11 per cent to $13.88 million from $21.73 million.
The figures highlight growing pressure on Pakistan’s regional trade balance as rising imports outpace export performance.
