ISLAMABAD: Pakistan’s trade deficit with nine neighbouring countries increased by 27.94 per cent in the first two months of FY26, reaching $2.592 billion compared to $2.026bn in the same period last year.

The widening deficit comes amid a decline in exports to most regional markets, with the exception of China, where exports showed signs of recovery during the period.

In FY25, Pakistan’s trade deficit with these countries had already grown by 29.42pc, rising to $12.297bn from $9.502bn in FY24. The trend of widening trade deficits has been consistent, as imports continue to surge while exports remain subdued.

In terms of exports, Pakistan’s shipments to the nine countries — Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives — fell by 1.52pc, totalling $654.05m in July-August FY26, down from $664.13m in the same months last year. For FY25, exports to these countries had increased by 1.49pc, reaching $4.401bn, up from $4.336bn in FY24.

The decline in exports this year is largely due to negative growth........

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