According to a report published by Dawn citing State Bank of Pakistan data, Pakistan's trade deficit with nine neighboring nations widened by 26.62 percent to reach $4.97 billion during the first quarter of the 2026-27 fiscal year, up from $3.93 billion during the same period in the previous year.

What happened

The expanding trade gap during the July-to-September quarter resulted from a combination of surging regional imports and a decline in Pakistan's exports to nearby markets. Lower shipments to Afghanistan and Bangladesh significantly impacted outbound trade performance. Furthermore, trade with Afghanistan has remained suspended since October 10, 2025.

Key facts

  • Overall exports to nine regional countries—Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives—fell 6.72 percent from $1.01 billion to $944.24 million.
  • Total imports from these regional partners rose 19.79 percent, increasing from $4.94 billion to $5.92 billion.
  • Imports from China grew 19.76 percent to $5.82 billion, while exports to China increased 17.95 percent to $663.57 million. China accounted for roughly 82.18 percent of the increase in the regional deficit, with its bilateral trade gap widening by $858.808 million.
  • Exports to Afghanistan plummeted 88.34 percent to $18.86 million, while imports fell 94.40 percent to $0.25 million.
  • Imports from India grew 68.90 percent to $61.74 million, whereas Pakistan recorded no exports to India during the first quarter.
  • Exports to Bangladesh fell 2.96 percent to $174.77 million, and imports from Bangladesh dropped 36.11 percent to $13.88 million.
  • Shipments to Sri Lanka declined, while exports to Nepal grew in percentage terms despite remaining negligible in dollar value. Detailed trade statistics for Iran, Bhutan, and the Maldives were not specified in the source; please check the official notice.

Why it matters

As reported by Dawn, the growing deficit highlights key shifts in regional commerce. The higher trade gap was largely driven by a substantial rise in Chinese imports alongside reduced export earnings from traditional regional trading partners such as Afghanistan and Bangladesh.

📰 Read the Original Report

Source: Dawn - Home · Published October 27, 2026 · Photo by Brett Jordan on Unsplash