Pakistan’s merchandise trade deficit widened to US$3.877 billion in October 2026, up 19.7 per cent from the same month last year. Imports rose much faster than exports: the import bill increased 11.81 per cent to US$6.806 billion, while goods exports grew 2.84 per cent to US$2.929 billion. The latest figures show why a small rise in exports is not enough when imports are expanding at a quicker pace.
The October result is also part of a wider four-month pattern. From July to October, the goods trade deficit reached US$14.628 billion, compared with US$12.614 billion a year earlier. These are provisional merchandise-trade figures, not the complete balance of payments and not a measure of services trade.
October 2026: imports grew faster than exports
| Goods trade | October 2026 | October 2025 | Year-on-year change |
|---|---|---|---|
| Exports | US$2.929bn | US$2.848bn | +2.84% |
| Imports | US$6.806bn | US$6.087bn | +11.81% |
| Trade deficit | US$3.877bn | US$3.239bn | +19.70% |
The difference between imports and exports widened by about US$638 million compared with October 2025. Exports covered approximately 43 per cent of the import bill in the month, based on the published totals. This coverage ratio is a simple comparison of goods exports with goods imports; it is not the same as the country’s current-account balance.
The four-month picture is more important than one month
Monthly trade data can be volatile because shipments, commodity prices and customs clearances do not occur evenly. The July–October comparison provides a wider view of the first four months of FY2026–27.
| Goods trade | July–October 2026 | July–October 2025 | Year-on-year change |
|---|---|---|---|
| Exports | US$11.336bn | US$10.446bn | +8.52% |
| Imports | US$25.964bn | US$23.060bn | +12.59% |
| Trade deficit | US$14.628bn | US$12.614bn | +15.97% |
Over the four-month period, exports increased by about US$890 million, while imports increased by roughly US$2.904 billion. The faster rise in imports explains why the deficit expanded even though export receipts were higher than a year earlier. Goods exports covered about 43.7 per cent of goods imports over July–October, slightly above the October-only ratio but still below half.
What changed between September and October?
The month-on-month comparison also points to a wider gap. October exports were about 0.21 per cent higher than September’s final figure, while imports rose 5.72 per cent. The monthly deficit increased around 10.3 per cent, from US$3.515 billion in September to US$3.877 billion in October.
This comparison should be read with the status of the data in mind. The October figures are provisional, while the September values in the latest summary are marked final. PBS revises trade data as additional customs and export-processing-zone information becomes available. A later revision can change the exact monthly totals without changing the broader need to compare imports and exports over several periods.
Why a goods trade deficit is not the same as a current-account deficit
The merchandise trade balance records physical goods crossing Pakistan’s borders. The current account is wider. It also includes services trade, primary income such as investment income, and secondary income including workers’ remittances.
This distinction matters because Pakistan can have a large goods deficit while services exports and remittance inflows help offset part of the external gap. It is equally possible for strong services exports to coexist with a merchandise deficit that remains difficult to finance. Verity Pakistan’s separate analysis of Pakistan’s services exports and the first-quarter services trade deficit explains why the two sides should be assessed separately rather than merged into one headline.
A wider goods deficit can add to the country’s need for foreign exchange, but it does not by itself prove that reserves will fall or that the rupee must weaken. Those outcomes also depend on remittances, services receipts, external borrowing and repayments, investment flows, official financing and the timing of payments. The trade release alone cannot settle the outlook for the exchange rate or reserves.
What the headline figures cannot yet explain
The summary tells us that the import bill increased, but the headline totals do not identify how much of the rise came from petroleum, machinery, vehicles, food, chemicals or other product groups. Without the detailed product breakdown, it would be premature to attribute the entire increase to one category or to claim that it proves a particular change in household or industrial demand.
Similarly, export growth of 2.84 per cent in October does not show which industries performed well or poorly. A stronger assessment requires the product-level export data, the destination markets, unit values and shipment volumes. A higher dollar value can reflect more goods shipped, higher prices, or a different mix of products.
Four indicators to watch after October
- Product-level imports: check whether the increase is concentrated in energy, machinery, vehicles, food or intermediate inputs used by manufacturers.
- Export composition: look beyond the total to see whether textiles, rice, engineering goods and other sectors are gaining or losing ground.
- Services exports and remittances: these are separate foreign-exchange inflows that help explain the wider external account.
- Revisions and the current account: compare provisional monthly trade figures with later PBS revisions and the State Bank’s balance-of-payments release.
What the figures mean for businesses and households
Import-dependent businesses may be affected by changes in foreign-exchange availability, freight costs, supplier prices and the timing of payments. Exporters, meanwhile, need to know whether their sales are growing faster than their input costs and whether they can compete in overseas markets. The October trade figures do not identify the effect on any single company or product, but they provide a reason to monitor the cost and composition of trade more closely.
For households, the deficit is not a direct forecast of petrol prices, food prices or the exchange rate. It is one part of the external-account picture. The prices people pay also depend on domestic taxes, distribution costs, market supply, energy pricing and the exchange rate at the time imports are purchased.
Pakistan’s wider growth outlook is covered in Verity Pakistan’s review of the revised GDP growth estimate. Trade performance is one component of that story, but the quality of export growth, domestic production and the ability to earn foreign exchange sustainably matter more than a single monthly deficit figure.
Official trade data: Pakistan Bureau of Statistics — Monthly Summary on Foreign Trade Statistics for October 2026.
Illustrative photograph of shipping containers at a cargo port. Photo by Barrett Ward via Unsplash.