Pakistan’s growing trade deficit is raising concerns among financial experts as the current fiscal year approaches its end.
Analysts warn that the widening gap between imports and exports could place additional pressure on the country’s foreign exchange reserves and overall balance of payments position.
According to market experts, the trade deficit may reach nearly $32 billion by the close of the fiscal year. Rising import payments before June 30 and higher global oil prices linked to Gulf tensions are being seen as major reasons behind the pressure.
Some analysts believe that the relatively stable Pakistani rupee has encouraged imports by making foreign goods cheaper. They argue that the managed exchange rate has increased purchases of luxury products and imported vehicles.
Official data shows that imports of completely built-up vehicles rose sharply to $317 million during the first 10 months of FY26, compared to $76 million during the same period last year.
Imports of completely knocked-down vehicle kits also increased significantly to $1.37 billion.
The Pakistani rupee, which had crossed Rs. 306 against the US dollar in 2023, later recovered and has remained mostly stable below Rs. 280 in recent months.
However, some market participants claim that cryptocurrency transactions are attracting dollars at higher exchange rates, indicating possible pressure on the currency.
Meanwhile, foreign investment activity has weakened. Data from the State Bank of Pakistan shows that foreign investors withdrew more money from Pakistan’s equity market than they invested during FY26.
Experts warn that despite strong remittance inflows, continued import growth could still lead to a current account deficit and create further challenges for the country’s economic stability.