ISLAMABAD: Pakistan‘s trade deficit with Middle Eastern nations shrank by 3.99 percent in the first quarter of fiscal year 2026, driven by declines in both imports and exports, data from the State Bank of Pakistan (SBP) show.
The trade gap with the region totaled $3.558 billion during July-September FY26, down from $3.706 billion in the same period last year. This reverses a trend from FY25, when the deficit widened 7.37 percent to $13.974 billion, compared to $13.014 billion the prior year.
A key factor in the narrowing deficit was a 5.48 percent decrease in imports from the Middle East, falling to $4.274 billion from $4.522 billion.This decline was largely attributed to reduced oil purchases, particularly from the united Arab Emirates (UAE), as Pakistan began sourcing crude oil from the United States under a new energy arrangement.
Exports to the region also decreased, dropping 12.19 percent to $715.63 million compared to $815.04 million a year earlier.In FY25,exports slipped 1.52 percent to $3.107 billion, while imports rose 5.64 percent to $17.081 billion,contributing to the larger annual trade gap.
Pakistan recently signed a free trade agreement (FTA) with the Gulf Cooperation Council (GCC) in an effort to improve market access for Pakistani products and address the longstanding trade imbalance.
Country-Specific Performance
Exports to Saudi Arabia fell 8.94 percent to $160.24 million in July-September FY26, from $175.99 million in the same period last year, while imports from the kingdom dropped 16.99 percent to $884.01 million, from $1.065 billion.
Trade with the UAE presented a mixed picture. Exports declined 12.95 percent to $491.58 million, from $564.72 million, while imports rose 7.61 percent to $2.163 billion, from $2.010 billion. pakistan’s primary exports to the UAE include rice,bovine meat,cotton garments,guavas,and mangoes.
Exports to Bahrain fell to $12.79 million from $14.63 million,while imports surged to $76.02 million from $19.09 million. Exports to Qatar declined to $23.63 million from $33.18 million, while imports dropped 12.21 percent to $781.34 million, from $890.07 million.Exports to Kuwait edged up to $27.39 million from $26.52 million, but imports decreased to $369.84 million, from $538.03 million.
Officials noted that while the quarterly data show a modest enhancement,the overall trade balance with the Middle East remains heavily reliant on petroleum imports. Sustained progress will require Pakistan to diversify it’s export base beyond customary products and explore new markets.
Published in Dawn, November 9th, 2025
