Pakistan’s exports got off to a stronger start in the new fiscal year, but the improvement came alongside a wider trade gap as imports continued to rise.
Merchandise exports increased 10.84 per cent in the first quarter of FY27, reaching $8.43 billion compared with $7.59 billion in the same period last year, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday.
September provided an even stronger showing. Export proceeds rose 17.61 per cent year-on-year to $2.94 billion, up from $2.49 billion a year earlier. Exports were also 16.07 per cent higher than in August.
The figures point to some improvement in export performance after a difficult previous year. Pakistan’s merchandise exports fell 5.97 per cent in FY26 to $32.04 billion, missing the annual target by $4.87 billion.
The government has set ambitious goals for exports. The Planning Ministry had earlier projected that export proceeds would reach $60 billion by 2030. It has since raised the longer-term target to $100 billion by 2035.
Officials expect the impact of measures introduced in the latest budget to become clearer in the coming months. The improvement in September also came despite Prime Minister Shehbaz Sharif’s concerns over the performance of the export sector.
Exporters, however, say higher exports do not mean that the sector’s problems have eased.
Jawed Bilwani, coordinator of the All Pakistan Exporters Association Forum, said exporters were facing high production costs, weak competitiveness and a lack of a level playing field.
He said exporters were working with thin profit margins while dealing with higher taxes, delays in refunds and deductions by the Federal Board of Revenue. These issues, he added, were putting further pressure on businesses already struggling with liquidity.
The sector has also faced disruption from regional tensions. Shipping costs have increased following disruptions around the Strait of Hormuz, while exports to Afghanistan have remained suspended since October 2025.
Trade gap widens
The stronger export numbers were not enough to contain the trade deficit.
Pakistan’s imports rose 13.21 per cent in the first quarter to $19.22 billion from $16.97 billion a year earlier.
As a result, the trade deficit widened 15.13 per cent to $10.79 billion, compared with $9.37 billion in the same quarter of FY26.
September imports increased 11.05 per cent year-on-year to $6.49 billion from $5.84 billion. On a monthly basis, imports also rose 11.05 per cent.
The higher import bill continues to put pressure on Pakistan’s external trade balance. In FY26, imports increased 7.89 per cent to $69.59 billion from $64.51 billion a year earlier.
In September alone, the trade deficit stood at $3.55 billion, up 6.15 per cent from $3.35 billion in the same month last year.
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