Pakistan bought far more than it sold in October, and the gap widened again. The Pakistan Bureau of Statistics puts October exports at $2.929 billion and imports at $6.806 billion, leaving a merchandise trade deficit of $3.877 billion. That is 19.7 percent wider than October last year and 10.3 percent wider than September. The four-month deficit for July to October now stands at $14.628 billion, up 16 percent on a year earlier.
October in one month
Imports were 2.32 times exports in October, so export earnings covered only 43 percent of the import bill. The monthly gap was itself 32.4 percent bigger than everything the country exported in the month. Exports rose just 2.8 percent year on year, adding $81 million, while imports rose 11.8 percent, adding $719 million, almost nine times export growth in dollar terms.
The deficit rose $362 million in a single month while exports edged up by only $6 million. Imports rose 5.7 percent in the month, from $6.438 billion to $6.806 billion, so practically the whole monthly widening came from the import side.
The four-month picture
Across July to October, exports reached $11.336 billion, up 8.5 percent, and imports reached $25.964 billion, up 12.6 percent. The gap of $14.628 billion is 129 percent of total exports: Pakistan spent $3.29 billion more on the gap alone than it earned from all exports combined. The extra widening against last year is $2.014 billion, equal to 17.8 percent of the four months of export earnings and nearly 69 percent of October’s entire export total.
The comparison sits on a bigger base than previously reported. The statistics bureau has revised past import figures upward by about $14.86 billion over five years after reconciling customs records, lifting the fiscal 2025 deficit from $26.32 billion to $32.47 billion. If the first four months of this year kept their pace for twelve months, the deficit would reach about $43.88 billion, roughly 35 percent above last year’s revised full-year figure. That is a pace, not a forecast, but it shows how far the current run rate sits from last year’s outcome.
Remittances covered the gap, until October
Workers sent home $10.88 billion in July to September, up 14 percent on a year earlier. That almost exactly matched the $10.75 billion trade gap of the same three months, covering it 101 percent. October then added a $3.88 billion gap with no remittance month yet counted against it, and October remittances are not yet published.
The current account deficit for July to September was $874 million, against $755 million a year earlier, because remittances and other inflows absorbed much of the trade gap. The Finance Division also reported an overall balance of payments surplus of $3.1 billion for the quarter, helped by a $3 billion sovereign Eurobond issued in September and higher foreign investment. The gap is being financed, not closed, and Pakistan owes $135bn in external debt, so every month of financing adds to obligations that must be repaid later.
Where the imports come from
In the first quarter, machinery imports rose 19.3 percent, metal imports 24 percent and transport equipment 19.2 percent, while petroleum imports rose 6.5 percent. Brent crude averaged $116.8 a barrel in September, up 28.4 percent from August, which kept energy costs high. Food exports grew 25.3 percent, led by rice, but textiles, the largest export earner, grew only 5.3 percent in the quarter.
Textiles carried $6.86 billion of the $11.34 billion earned in the four months, about 60.5 percent of all exports. Nearly half the first-quarter gap sits with nine neighbours: the regional deficit was $4.97 billion in July to September, up 26.6 percent, and China accounted for 82 percent of that increase, with imports from China at $5.82 billion against exports to China of $664 million. A weaker rupee raises the rupee cost of every dollar of imports, tracked in the USD to PKR exchange rate today.
What happens next
Three tests will show whether the gap narrows or keeps widening: first, the November trade figures from the statistics bureau, which will show whether October’s import jump was a spike or a new pace; second, the State Bank’s current account data for October, which will show how much of the $3.88 billion gap remittances covered; third, the IMF board decision on the roughly $1.2 billion tranche agreed at staff level on 7 October. SBP reserves at $21.56 billion would cover about five and a half October-sized gaps, and total liquid reserves of $26.86 billion cover about seven months at the current monthly pace. Reserves rose $40 million in the week to 30 October, but the gap is rising faster.
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