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KARACHI, Aug. 6, 2026: Pakistan’s trade deficit widened by more than 25% year-on-year to US$3.95 billion in July 2026, prompting concern from United Business Group (UBG) President and former FPCCI President Zubair Tufail, who warned that the country’s growing reliance on imports continues to pressure the economy.
Tufail said the trade deficit eased around 15% compared with June, but imports remained unusually high, reflecting stronger economic activity and Pakistan’s dependence on imported energy, industrial raw materials, and machinery.
According to him, import payments rose nearly 18% to US$6.89 billion in July, while exports increased by about 10%. He attributed the higher import bill to increased industrial demand and a sharp rise in global energy prices amid geopolitical tensions in the Middle East.
He noted that petroleum products and re-liquefied natural gas (RLNG) became 40% to 50% more expensive than a year earlier. Since energy accounts for roughly 20% to 25% of Pakistan’s total imports, the price surge significantly inflated the country’s import bill. Higher imports of machinery and vehicles also contributed to the wider trade gap.
Despite the rising deficit, Tufail described export growth as a positive sign. He said food exports, particularly rice, supported export earnings, while textiles remained Pakistan’s largest export sector, contributing 55% to 60% of total exports. He added that the detailed trade report later this month would provide a clearer picture of the sectors driving export growth.
To narrow the trade deficit, Tufail urged the government to provide affordable electricity and gas to industries, clear exporters’ pending refunds and tax rebates on time, promote value-added exports, and strengthen trade diplomacy to access new markets.
He also stressed that reducing industrial production costs, encouraging alternative energy and import-substitution industries, and maintaining consistent export policies are essential for achieving sustainable economic growth.
