Pakistan’s trade deficit with Middle Eastern countries widened by 9.89% to $11.731 billion during the first ten months of the current fiscal year (July–April FY25), compared to $10.675 billion in the same period last year, according to data released by the State Bank of Pakistan.
The growing trade gap is primarily driven by a nearly 15% surge in petroleum product imports, as domestic consumption increased. While imports from the region saw a significant rise, Pakistan’s exports to Middle Eastern countries showed only marginal growth of 4%, reaching $2.624 billion from $2.523 billion a year ago.
In contrast, total imports from the Middle East climbed 8.76% to $14.355 billion, up from $13.198 billion during the same period last fiscal year. Notably, in FY24, imports had declined by 13.53% to $16.16 billion due to reduced petroleum demand linked to rising domestic fuel prices.
To address the widening trade imbalance, Pakistan recently signed a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC) countries. This move is expected to boost exports to key regional markets, including the UAE, Saudi Arabia, and Qatar, where demand for Pakistani goods has shown promising growth.
Country-wise Trade Performance:
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Saudi Arabia: Exports to Saudi Arabia rose by 4.49% to $605.39 million, while imports from the kingdom decreased significantly by 16.26% to $3.176 billion.
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United Arab Emirates (UAE): Exports increased by 8.67% to $1.779 billion, largely supported by demand in Dubai. However, imports from the UAE jumped 30.81% to $6.614 billion.
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Qatar: Exports dropped 27.87% to $100.51 million, while imports rose by 7.83% to $2.933 billion.
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Kuwait: Exports declined by 10.84% to $97.59 million, and imports slightly decreased by 1.69% to $1.453 billion.
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Bahrain: Exports fell sharply by 28.66% to $41.93 million, whereas imports increased by 18.37%.
The imbalance underscores the need for stronger export strategies and diversification to counter the rising dependency on petroleum imports and improve trade dynamics with the Middle East.