Pakistan’s Trade Deficit has surged to $9.4 billion in the first quarter (July–September) of the 2025–26 fiscal year, which is mainly attributed to factors like a slowdown in the textile sector and a significant drop in rice exports. Surprisingly, rice exporters in Pakistan rejected the claim of 60% crop losses after floods and claimed that the yields will be positively high. According to data from the Pakistan Bureau of Statistics, exports decreased by 3.88%, totaling $7.6 billion, compared to $7.9 billion during the same period last year. This decline is attributed to reduced demand and challenges in the global market.
Noatbly, textile industry is a cornerstone of Pakistan’s economy and experienced a 5.63% increase in exports during the first quarter. However, this growth was overshadowed by declines in other sub-sectors. cotton cloth exports fell by 14%, and raw cotton exports remained stagnant. Concurrently, rice exports plummeted by 42%, with Basmati rice exports declining by 43.64% and other varieties like IRRI-6 and IRRI-9 dropping by 41.10% year-on-year. The major factor leading to trade deficit in Pakistan is the increase in imports during the same period. Imports rose rose by 13.9%, reaching $17 billion, up from $14.95 billion in the previous year. This increase is largely due to higher costs in essential commodities such as petroleum products, palm oil, and mobile phones. The surge in imports, coupled with declining exports, has exacerbated the trade deficit, putting additional pressure on Pakistan’s foreign exchange reserves and the value of the Pakistani rupee.
This widening trade deficit poses significant challenges to Pakistan’s economic stability, which affects the country’s ability to meet international obligations and can lead to inflationary pressures.