Pakistan recorded an important trade achievement in January 2026 when its exports crossed the $3 billion mark for the first time. This strong performance helped reduce the country’s monthly trade deficit by 28.5%, bringing it down to $2.725 billion compared to December 2025.
Exports showed a sharp improvement on a month-on-month basis. They increased by nearly 35% and reached $3.061 billion in January.
At the same time, imports declined by around 4.85% and stood at $5.786 billion. The combination of higher exports and lower imports played a key role in easing pressure on the trade balance during the month.
On a year-on-year basis, the improvement was more modest but still positive. Exports grew by 3.73% compared to January last year, while imports fell by 1.41%. This helped slightly narrow the trade gap on an annual comparison as well, showing some progress in managing external trade pressures.
However, despite the strong monthly numbers, the overall picture remains challenging. When looking at cumulative trade data from July to January of the current fiscal year (FY26), the trade deficit has actually widened. During this period, the deficit reached $22.038 billion, which reflects continued structural issues in Pakistan’s trade sector.
This means that while January’s performance is encouraging and shows what is possible with better export growth and controlled imports, it is not enough on its own. Pakistan still faces long-term challenges related to export diversification, competitiveness, energy costs, and reliance on imports.
Sustaining export growth over the coming months will be critical if the country wants to meaningfully improve its trade balance and reduce pressure on its balance of payments.
