KARACHI: President of the United Business Group (UBG) and former President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Zubair Tufail, has expressed concern over Pakistan's trade figures for July 2026, stating that the country's trade deficit has increased by more than 25% to reach US$3.95 billion. He noted that while the trade deficit declined by around 15% on a month-on-month basis, the continued rise in imports indicates that Pakistan's economy remains heavily dependent on imported goods and energy.
According to United Business Group, import payments during July 2026 increased by nearly 18% to US$6.89 billion, while export earnings also recorded an increase of approximately 10%. Tufail attributed the recovery in economic activity to high demand for industrial raw materials, machinery, and other essential goods, which resulted in elevated imports. He mentioned that an increase in global energy prices, driven by geopolitical tensions in the Middle East, significantly contributed to the higher import bill.
Tufail highlighted that the prices of petroleum products and re-liquefied natural gas (RLNG) rose by 40% to 50% in July 2026 compared to the same month last year, directly increasing Pakistan's import bill. As an energy-importing country, energy historically accounts for 20% to 25% of Pakistan's total imports. Additionally, increased imports of machinery and vehicles required by the industrial and agricultural sectors further widened the trade deficit.
Tufail noted that the growth in exports is an encouraging development, with food products, particularly rice, playing a significant role in improving export earnings. He stated that textiles continue to be Pakistan's largest export sector, contributing 55% to 60% of total exports. According to him, textile exports remained stable during the fiscal year ended June 30, 2026. The detailed trade report to be released later this month will provide a clearer picture of which products made the largest contribution to export growth in July.
He urged the government to ensure the availability of affordable electricity and gas to industries to achieve sustainable export growth. He also called for the timely payment of exporters' refunds and tax rebates, promotion of value-added products, and strengthening of trade diplomacy to expand access to new international markets. Tufail emphasized that reducing industrial production costs, promoting alternative energy sources, encouraging import-substitution industries, and providing consistent policy support to exporters would not only help reduce the trade deficit but also place Pakistan on a path of sustainable economic growth.