Trade deficit widens 8% in February, exports slump

March 02, 2026 (MLN): Pakistan’s trade deficit widened by 8.4% month-on-month (MoM) to $2.98 billion in February 2026, compared to $2.75bn in January 2026, as exports declined sharply during the month.

The deterioration came on the back of a significant drop in exports alongside a moderate contraction in imports, according to provisional data released by the Pakistan Bureau of Statistics (PBS).

On a year-on-year (YoY) basis, the trade deficit expanded by 4.63% from $2.85bn recorded in February 2025, reflecting continued pressure on the external account.

Monthly Performance:

Exports in February 2026 fell to $2.27bn, registering a steep 25.63% MoM decline compared to $3.05bn in January 2026, reversing the previous month’s strong performance.

Imports also decreased to $5.253bn, down 9.51% MoM from $5.805bn in January.

However, the sharper fall in exports relative to imports led to a wider monthly trade gap.

As a result, the trade deficit expanded to $2.98bn during the month.

Yearly Performance:

On a YoY basis, exports declined by 8.76% from $2.49bn in February 2025.

Imports also edged lower by 1.61% YoY from $5.34bn, but the smaller decline in imports compared to exports resulted in the trade deficit increasing to $2.98bn, up 4.63% from $2.849bn in the same month last year.

Cumulative Trend (July – February FY26):

During the first eight months of FY26, total exports stood at $20.46bn, marking a 7.3% decline YoY compared to $22.07bn in the same period of FY25.

Meanwhile, cumulative imports surged 8.06% YoY to $45.50bn, up from $42.11bn last year.

Consequently, the cumulative trade deficit widened significantly to $25.04bn, reflecting a 25% increase compared to $20.037bn in the corresponding period of FY25.

Despite a moderation in imports, the sharp monthly contraction in exports and the widening cumulative deficit highlight persistent structural imbalances in Pakistan’s external sector, keeping pressure on the country’s balance of payments position.

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