Pakistan’s trade deficit with Gulf nations widened 28.4% to $1.4 billion in July, the first month of the current fiscal year, driven by rising imports from the oil-rich region, State Bank of Pakistan (SBP) data showed this week.
Last year in July, the gap with the six-member Gulf Cooperation Council (GCC) — Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Oman and Bahrain — had stood at $1.09 billion.
This time around, exports to the bloc fell 12.5% year-on-year to $277.3 million, while imports rose 19% to $1.68 billion.
Pakistan has been negotiating a free trade agreement (FTA) with the GCC to improve market access and signed preliminary accords in Riyadh two years ago.
“This is a significant development as the FTA is the first by GCC with any country since 2009 and marks a milestone in both sides’ economic cooperation,” then-commerce minister Gohar Ejaz said at the time.
Pakistan has continued to rely heavily on petroleum supplies from GCC states since then.
Its imports from the bloc totaled $17.9 billion in FY2024-25, nearly matching earnings from the country’s textile exports. In return, Pakistan exported $3.79 billion worth of goods and services to the GCC.
According to the data, the widening deficit reflects surging imports from the UAE, Pakistan’s largest oil supplier in the bloc.
July imports from the Emirates reached $816 million, while the FY25 bill stood at $8 billion.
The UAE is also Pakistan’s biggest export market in the GCC, buying $2.12 billion worth of goods last year, SBP data showed.
Saudi Arabia and Qatar were other key suppliers, exporting $3.8 billion and $3.5 billion worth of oil and gas to Pakistan respectively in FY25.
Pakistan’s cash-strapped government is struggling to rein in its external account by curbing imports and boosting exports, but the country’s overall trade deficit rose nine percent to $26 billion last year, according to the Pakistan Bureau of Statistics.
