Pakistan’s trade sector took a severe hit in the first five months of the current fiscal year, with fresh data showing a sharp fall in exports and a steep rise in imports.

The Pakistan Bureau of Statistics attributes the worsening performance primarily to regional tensions and growing trade barriers.

According to the newly issued report card, Pakistan’s trade deficit widened by more than 37%, increasing by $4.19 billion compared to the same period last year. Between July and November, the deficit rose to over $15.46 billion, driven largely by shrinking exports and rising import volumes.

During the same five-month stretch last fiscal year, Pakistan recorded a trade deficit of $11.27 billion, highlighting the depth of the current downturn.

Exports decline by $877m

The report shows a significant drop of $877 million in domestic exports during the July–November period. Total exports stood at $12.84 billion, reflecting a 6.39% decline from the $13.72 billion recorded in the corresponding months of the previous year.

Officials say recent regional tensions and restrictions have severely disrupted trade flows, with food exports experiencing the steepest fall.

Imports surge 13.26% to more than $28bn

In contrast to the export slump, Pakistan’s import bill grew sharply. Imports rose 13.26% during the first five months, reaching $28.31 billion. This imbalance between declining exports and rising imports significantly contributed to the widening trade gap.

Nov 2025 sees steep month-to-month export drop

The month of November 2025 proved especially challenging. According to the Bureau of Statistics, Pakistani exports plunged 15.80% compared to October -- a loss of $450 million in a single month. Exports fell from $2.84 billion in October to $2.39 billion in November.

Also Read: Pakistan abolishes export development surcharge after 34 years

Imports during November also decreased by 13.70%, settling at $5.25 billion, yet the trade deficit still stood at $2.85 billion, down 11.86% from October. On a year-on-year basis, exports dropped 15.35% compared to November 2024.

Trade deficit jumps 33%

Despite the fall in imports, the November trade deficit surged 33% compared to the same month last year. Economists say this reflects structural weaknesses in Pakistan’s export base coupled with external strains, including the ongoing regional situation.

The report concludes that recent regional tensions and trade barriers remain the primary drivers behind declining exports and the widening trade deficit. Authorities warn that unless geopolitical conditions stabilize, Pakistan’s trade performance may face further setbacks in the coming months.

On the other hand, the Federal Board of Revenue (FBR) officially abolished the Export Development Surcharge (EDS) after 34 years, issuing a formal notification received by the State Bank of Pakistan.

The move followed instructions from the prime minister in November to increase exports. The FBR’s Customs Wing forwarded the notification to the SBP, which would prevent banks from deducting the EDS from export proceeds.

The surcharge, previously set at 0.25% of the export value, had generated approximately Rs5 to Rs6 billion annually since 2011. According to Zubair Motiwala, the Export Development Fund currently holds Rs50 billion.