ISLAMABAD: Pakistan’s merchandise exports not only missed the annual target by $4.87bn for FY26, but also contracted, reflecting the PML-N-led coalition government’s failure to achieve visible improvement over the last four years.

The export proceeds also contracted by 5.97pc compared with last year’s $32.04bn.

Furthermore, the trade deficit widened amid a rise in imports and a decline in exports, the Pakistan Bureau of Statistics said on Thursday.

In absolute terms, export proceeds were recorded at $30.13bn in FY26, against the budget-projected target of $35bn. Despite the missed target, the Ministry of Commerce did not issue any statement explaining the decline in exports.

Proceeds contract 6pc year-on-year to $30.13bn; trade gap widens 21.57pc

The declining trend has persisted in recent months, with exports posting negative growth in February and March, followed by a brief recovery in April. Despite this short-lived improvement, exporters remain cautious and do not expect a sustained rebound in export earnings in the near term.

In June, exports dipped 9.61pc to $2.24bn, down from $2.47bn in the corresponding month last year. On a month-on-month basis, export proceeds dipped by 16.73pc.

Negative export growth has continued since August, except in July, when exports grew by 16.43pc year on year. Export earnings posted negative growth, with proceeds declining by 20.41pc in December 2025.

This follows a 14.54pc drop in November, 4.46pc in October, 3.88pc in September, and 12.49pc in August, reflecting persistent pressures on the country’s external trade performance.

However, in January, exports grew a modest 3.3pc but returned to a negative growth of 8.76pc in February and 14.4pc in March. Exports rose 14.03pc and 1.25pc in April and May year-on-year.

The export sector had already been under pressure since February due to the conflict in the Middle East. The disruptions in the Strait of Hormuz have pushed up shipping costs for exporters and disrupted supply chains. Similarly, exports to Afghanistan, which is a major market, had remained suspended since October 2025. These two factors also contributed to poor export performance in FY26.

In FY25, export proceeds rose 4.67pc to $32.106bn against $30.675bn in the preceding year.

Trade deficit

According to the PBS data, imports surged 26.27pc to $6.77bn in June, up from $5.36bn in the corresponding month last year. Month-on-month, imports increased 24.07pc.

In 2025-26, the import bill grew by 7.89pc to $69.59bn, up from $64.51bn in the corresponding period last year. Imports rose 6.57pc to $58.38bn in July-June FY25 from $54.78bn over the previous year.

The trade deficit swelled 57.11pc to $4.53bn in June compared to $2.88bn in the same month last year. However, the gap widened 21.57pc to $39.47bn in 2025-26 from $32.46bn in the preceding year. The trade deficit for FY25 increased by 9pc to $26.27bn, up from $24.11bn in the preceding year.

Published in Dawn, July 3rd, 2026