Pakistan's Trade Deficit Deepens, External Fragility Resurfaces in FY26

• Pakistan's external position strained in first seven months of FY26, with a current account deficit of USD 1.07 billion.
• Merchandise trade gap widened to USD 18.4 billion due to surging imports and declining goods exports.
• Imports rose by nearly 10% year-on-year, driven by industrial raw materials, energy, and capital equipment.
• Services exports, particularly IT and telecom, increased but couldn't offset the widening goods deficit.
• Foreign exchange reserves rose to USD 17.44 billion, largely supported by multilateral and bilateral loans, indicating reliance on external financing.