By Moaaz Manzoor

Pakistan’s trade deficit narrowed sharply in January 2026, falling by 28.57 percent month on month, as a strong rebound in exports combined with a decline in imports, according to data released by the Pakistan Bureau of Statistics (PBS) on Monday.

The trade deficit stood at Rs765,217 million ($2,725 million) in January 2026, compared with Rs1,071,289 million ($3,813 million) in December 2025. The improvement signalled easing pressure on the external account during the month, driven primarily by higher export receipts.

Exports in January were recorded at Rs857,047 million ($3,061 million), marking a 34.81 percent increase in rupee terms and a 34.96 percent rise in dollar terms from Rs635,746 million ($2,268 million) in December 2025. The month-on-month recovery points to an improved export performance following a subdued previous month.

In contrast, imports declined to Rs1,622,264 million ($5,786 million) in January, down 4.97 percent in rupee terms and 4.85 percent in dollar terms from Rs1,707,035 million ($6,081 million) recorded in December 2025. The contraction in imports played a key role in narrowing the monthly trade gap.

On a year-on-year basis, trade performance showed mixed trends. Exports in January 2026 rose by 4.21 percent in rupee terms and 3.73 percent in dollar terms, increasing from Rs822,410 million ($2,951 million) in January 2025 to Rs857,047 million ($3,061 million). Imports, however, edged down by 0.80 percent in rupees and 1.41 percent in dollar terms compared with Rs1,635,355 million ($5,869 million) in the same month last year.

As a result, the trade deficit on a yearly basis narrowed by 5.87 percent in rupee terms and 6.61 percent in dollar terms, declining from Rs812,945 million ($2,918 million) in January 2025 to Rs765,217 million ($2,725 million) in January 2026.

Cumulatively, during the first seven months of the current fiscal year (July–January 2025-26), Pakistan’s exports were recorded at Rs5,122,465 million ($18,195 million), reflecting a decline of 5.97 percent in rupees and 7.09 percent in dollars compared with Rs5,447,859 million ($19,583 million) in the corresponding period of the previous year.

Imports during July–January increased to Rs11,337,653 million ($40,233 million), showing a rise of 10.82 percent in rupee terms and 9.42 percent in dollar terms from Rs10,230,768 million ($36,771 million) a year earlier.

Consequently, the cumulative trade deficit widened to Rs6,215,188 million ($22,038 million), an increase of 29.95 percent in rupees and 28.22 percent in dollar terms, compared with Rs4,782,909 million ($17,188 million) in the same period last year.

The data underscores continued structural pressures on Pakistan’s external sector, despite the short-term monthly improvement, as higher cumulative imports and relatively weaker export growth continue to weigh on the overall trade balance.

 
Credit: INP-WealthPk