ISLAMABAD: Pakistan’s trade deficit with Gulf partner countries widened by 2.61 per cent to $3.450 billion in the first two months of the fiscal year 2026-27 compared with $3.362bn in the same period a year earlier, as imports from the region outpaced exports.
Export proceeds posted moderate growth, driven by gains in Jordan (34.7pc), the UAE (13.6pc), and Oman (5.9pc). Declines were observed in Saudi Arabia, Qatar, Kuwait, and Bahrain, reflecting regional instability.
In contrast, imports from Qatar, Kuwait, Bahrain, and Saudi Arabia rose by 41.9pc, 27.6pc, 39.4pc, and 14.7pc, respectively. In 2MFY27, imports declined only from the UAE and Oman, according to data compiled by the State Bank of Pakistan.
Imports exceeded exports in Saudi Arabia, Qatar, Kuwait, and Bahrain. The UAE’s deficit narrowed slightly, while Jordan and Oman maintained relatively balanced trade trends.
Since Feb 28, the Middle East conflict has disrupted Pakistan’s trade. Exports to most Gulf states are shrinking, while imports from the region are surging, deepening Pakistan’s external vulnerability and dependence on Gulf energy and raw materials.
August marked the sixth month of contraction since March, suggesting that Pakistan’s import flows are highly sensitive to geopolitical developments, particularly along energy corridors.
Pakistan relied heavily on energy imports, particularly from the UAE and Saudi Arabia, which accounted for 90pc combined. Other countries, including Qatar, Kuwait, Oman, Jordan and Bahrain, remain secondary contributors despite their export capacity.
Pakistan’s exports to the Middle East increased by 7.4pc to $550.045 million in July-August FY27 from $512.293m over the corresponding period last year. In FY26, exports to the region fell by 2pc to $3.093 billion from $3.152bn a year ago.
In contrast, imports from the region also increased by 3.2pc to $4bn, compared with $3.874bn a year earlier. In FY26, imports fell 4pc to $16.413bn, compared with $17.097bn a year earlier.
Country-wise data showed that exports to Saudi Arabia dipped 1.7pc in 2MFY27 from a year ago. Imports, however, rose 14.7pc, showing a clear surge in Pakistan’s demand for Saudi goods, especially oil. This widened the trade deficit with Saudi Arabia.
Export proceeds to the UAE trended positively, increasing by 13.6pc in 2MFY27, with notable gains in Abu Dhabi, Ajman, and Fujairah. Imports from the UAE dropped slightly by 1pc, mainly due to reduced petroleum and commodity inflows. This shift significantly reduced Pakistan’s trade imbalance with the UAE.
According to the data, exports to Qatar declined 16.5pc, while imports surged 41.9pc in 2MFY27. This reflects a major reversal in energy-related purchases, which will now widen Pakistan’s deficit with Qatar.
Published in Dawn, September 27th, 2026
