Pakistan’s trade deficit with Gulf countries narrowed in the first month of 2026-27, with imports plunging and exports rising modestly.
The export proceeds posted moderate growth, concentrated in the UAE, Saudi Arabia and Jordan, while Qatar, Kuwait, and Bahrain weakened.
By contrast, the collapse in imports was energy-driven, with Pakistan slashing petroleum and LNG purchases from the UAE, Kuwait and Qatar.
Energy imports from Bahrain and Jordan grew in July, according to data compiled by the State Bank of Pakistan. July emerged as the fifth month following the March contraction, suggesting that Pakistan’s import flows are highly sensitive to geopolitical developments, particularly in energy corridors.
Imports plunge 44.3pc, exports rise 5.6pc in July
Pakistan was heavily reliant on energy imports, particularly from the UAE and Saudi Arabia, which together accounted for 90pc of its imports. Other countries, including Qatar, Kuwait, Oman and Bahrain, remain secondary contributors despite their export capacity.
Pakistan’s exports to the Middle East increased by 5.6pc to $271.60 million in July as against $257.16m in the corresponding month last year. In FY26, exports to the region fell by over 2pc to $3.093bn from $3.152bn in the preceding year.
In contrast, imports from the region dipped 44.3pc to $879.98m in July against $1.578bn a year earlier. In FY26, imports shrank 4pc to $16.413bn against $17.097bn a year earlier.
The country-wide data showed that exports to Saudi Arabia grew slightly, rising by about 4.5pc in July from a year ago. Imports, however, fell by more than 20pc, showing a clear contraction in demand for Saudi goods. This narrowed the trade deficit with Saudi Arabia.
A similar trend was observed in export proceeds to the UAE, which increased by 9pc in 1MFY27, with notable gains in Abu Dhabi, Ajman, and Fujairah. Imports dropped sharply by 36.4pc, mainly due to reduced petroleum and commodity inflows. This shift significantly reduced Pakistan’s trade imbalance with the UAE.
According to the data, exports to Qatar declined by nearly 16pc, while imports collapsed by almost 78pc in 1MFY27 on a year-on-year basis. The steep fall in imports reflects a major reduction in energy-related purchases, which drastically narrowed Pakistan’s deficit with Qatar.
Exports to Kuwait dipped 10.5pc, but imports plunged by nearly 97pc during the month under review. This indicates that Pakistan’s reliance on Kuwaiti imports, especially petroleum, shrank dramatically in July compared with a year ago.
Exports to Bahrain fell 32.2pc, while imports surged 118pc in 1MFY27 year-on-year. This reversed the previous balance, turning Bahrain into a stronger net exporter to Pakistan in July.
Exports to Jordan rose by 13.7pc, while imports grew 4.2pc. Trade with Jordan remained relatively balanced, with Pakistan’s exports maintaining a healthy upward trend.
Reference Link:- https://www.dawn.com/news/2027774