Qudsia Bano

Pakistan’s external trade position weakened during FY25 and is showing signs of further strain in FY26, as growth in exports of goods and services failed to keep pace with a rising import bill.

For the full FY25 period (July–June), the combined balance of goods and services recorded a deficit of $29.42 billion. This followed a brief improvement in the first half of the year, when the deficit stood at $2.03 billion, before widening sharply in the subsequent months.

Exports of goods and services reached $40.75 billion in FY25. Goods exports accounted for $32.34 billion, while services exports contributed $8.41 billion. Telecommunications, computer and information services remained the largest source of services export earnings at $3.81 billion. Other business services generated $1.69 billion, while transport and travel services recorded export receipts of $959 million and $730 million, respectively.

Imports expanded at a faster pace over the same period. Total imports of goods and services rose to $70.16 billion in FY25. Goods imports stood at $59.11 billion, while services imports amounted to $11.05 billion. Transport services dominated the services import bill at $4.65 billion, followed by travel services at $2.41 billion and other business services at $1.33 billion.

Half-yearly figures highlight the emerging imbalance. During July–December FY25, exports of goods and services totaled $20.41 billion, compared with imports of $33.52 billion, resulting in a trade deficit of $13.11 billion.

Provisional and revised estimates for FY26 suggest continued pressure on the trade account. In the first half of FY26 (July–December), exports of goods and services are projected at $20.27 billion, slightly below the level recorded in the same period of FY25. Imports, however, are provisionally estimated at $37.83 billion, widening the deficit to $17.56 billion.

Within services trade in FY26, telecommunications, computer and information services are projected to contribute $2.24 billion in export earnings during the first half of the year, while transport and travel services remain major components of the services import bill.

The FY25–FY26 data indicate that despite steady performance in services exports, particularly in information and communication-related segments, Pakistan’s trade balance remains vulnerable to sustained growth in goods and services imports.

Credit: INP-WealthPk