Trade Deficit with Middle East Soars 22%
- Trade dynamics between Pakistan and the Middle east are undergoing a significant shift, with a notable increase in imports from the region contrasting with a decline in exports,...
- Despite increased petroleum consumption in Pakistan, exports to the Middle East have experienced only modest growth, and are now demonstrably declining. In July FY26, exports to the Middle...
- conversely, imports from the Middle east have risen sharply.
middle East Trade with Pakistan Shifts: Imports Surge While Exports Decline
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Trade dynamics between Pakistan and the Middle east are undergoing a significant shift, with a notable increase in imports from the region contrasting with a decline in exports, according to data published in Dawn on September 9, 2025.
overall Trade Trends
Despite increased petroleum consumption in Pakistan, exports to the Middle East have experienced only modest growth, and are now demonstrably declining. In July FY26, exports to the Middle East fell by 16.11%, totaling $254.15 million, down from $302.99 million in the same month of the previous year. For the full fiscal year 2025 (FY25), exports to the region decreased by 1.52%, reaching $3.107 billion compared to $3.155 billion in FY24.
conversely, imports from the Middle east have risen sharply. Imports increased by 14.02% in July FY26, reaching $1.578 billion,up from $1.384 billion in the same period last year. This trend continued throughout FY25, with imports growing by 5.64% to $17.081 billion, compared to $16.169 billion in FY24.
Country-Specific Trade Performance
the decline in exports and surge in imports are evident across key Middle Eastern nations:
- Saudi Arabia: Exports to Saudi Arabia decreased by 5.95% in July FY26, reaching $54.02 million, down from $57.44 million the previous year. Imports from Saudi Arabia also saw a decline, falling 7.73% to $330.95 million from $358.71 million.
- United Arab Emirates (UAE): Exports to the UAE experienced a significant drop of 18.56%, falling to $176.65 million in July FY26 from $216.92 million the previous year. However,imports from the UAE surged by 47.77%, reaching $816.01 million,compared to $552.22 million in July FY25.
- Bahrain: Exports to Bahrain saw a slight increase, rising to $5.41 million in July compared to $4.85 million in the corresponding period last year.Imports from Bahrain, though, experienced a dramatic increase, rising to $14.01 million from just $2.64 million.
Potential Factors and Implications
The diverging trends in exports and imports suggest a changing economic relationship between Pakistan and the Middle East. Several factors could be contributing to this shift. Increased regional investment in infrastructure and development projects could be driving up demand for imports from Pakistan. Conversely, declining global commodity prices, or increased competition from other exporting nations, might potentially be impacting Pakistan’s export performance. The specific reasons for the sharp changes in trade with the UAE and Bahrain warrant further investigation.
The increasing reliance on Middle Eastern imports, notably given the decline in exports, could perhaps widen Pakistan’s trade deficit and put pressure on its foreign exchange reserves. Analyzing the composition of imports