Karachi: Pakistan's trade deficit has widened significantly, driven by increased import costs linked to the ongoing US-Iran conflict, according to a recent press release by Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum. The trade deficit reached $39.471 billion for the fiscal year 2025-26, marking a 21.57 percent increase from the previous year, despite remittances and services exports providing crucial economic support.

According to Pakistan Businessmen and Intellectuals Forum, the rise in the trade deficit is largely attributed to a 7.89 percent increase in imports, totaling $69.597 billion, while exports declined by 5.97 percent to $30.126 billion. Hussain emphasized the country's reliance on imports of petroleum products, LNG, and raw materials, which have been affected by volatility in the global energy market due to the conflict. The month of June 2026 saw particularly high import levels, leading to a monthly trade deficit of $4.528 billion.

Hussain noted that remittances from overseas Pakistanis have played a vital role in supporting the national economy amid these challenges. The inflow of remittances has bolstered foreign exchange reserves, stabilized the rupee, and alleviated pressure on the current account. Additionally, services exports, including IT and digital services, have seen a 17.38 percent increase, contributing positively to Pakistan's balance of payments.

However, the decline in goods exports remains a significant concern. Hussain highlighted several factors contributing to this decline, such as high energy costs and a complicated tax system. He urged the government to implement measures to enhance industrial competitiveness and improve logistics. He also called on the business community to diversify products and explore non-traditional markets to boost export growth.

Despite the challenges, Hussain acknowledged the government's effective handling of external shocks, such as the US-Iran war and rising oil prices. Nonetheless, he stressed that sustainable economic stability is achievable only through a focus on export-led growth.