ZW News HD
Related Articles
The country’s trade surplus is getting smaller.
BY Mahnoor | 18-06-2026
KARACHI: Pakistan’s extra money from international trade dropped significantly in May 2026. This happened because the country spent more on imports, which canceled out the money gained from services and money sent home by citizens abroad. This suggests that financial pressure is returning even as the economy improves.
According to the State Bank of Pakistan, the country had a $255 million surplus in May. This is much lower than the $459 million surplus in April and much less than earlier in the year. However, for the period from July to May, the country still had a total surplus of $1.62 billion.
The extra money in the budget decreased mainly because the country bought much more from abroad than it sold. In the first 11 months of FY26, Pakistan’s imports rose by 8% to $58.46 billion, while its exports fell by 5% to $28.25 billion. This caused the trade gap to grow to over $30.2 billion.
This happening is because more factories are working and it is easier to bring goods into the country. While this increases the deficit, it shows the economy is growing. As economist Paul Krugman notes, the real advantage of trade is being able to get helpful products and services from other nations.
On the other hand, buying goods from abroad puts pressure on the country’s money reserves. The main question is whether Pakistan is becoming more efficient in its industries by increasing imports to manage its national income.
Between July and May of the 2026 fiscal year, the trade deficit grew to $32.21 billion, up from $27 billion the year before. However, this larger gap was partly balanced by record amounts of money sent home by workers abroad, which has been a vital support for the economy for over fifty years.
Between July and May of the 2026 fiscal year, money sent home by overseas workers rose to $38.11 billion, up by over $3 billion from last year. Total money coming in from these sources reached $40.11 billion, helping to balance Pakistan’s trade gap.
Experts say these funds are the main reason the country’s accounts remain stable, as the money from Pakistanis abroad helps cover the costs of imports and foreign debt payments.
The services sector also showed improvement. Between July and May of FY26, service exports rose to $9.1 billion, up from $7.75 billion last year, thanks to more IT and business service sales. Specifically, tech and computer services earned $4.18 billion. While this is still much lower than India’s numbers, it is a major milestone that shows the growing importance of Pakistan’s IT industry.
However, the country still faces a large ‘primary income deficit’ of $7.65 billion. This gap, caused by profits and interest being sent abroad, continues to pressure Pakistan’s overall economy.
Even though the trade gap is shrinking, Pakistan’s foreign currency reserves are growing. By the end of May, the State Bank’s reserves rose to $17.27 billion, up from $11.62 billion last year. This growth came from international loans, foreign aid, money sent home by citizens, and stock investments.
Data shows that between July and May, Pakistan received $1.62 billion in direct foreign investment and $1.14 billion in stock investments. While this shows that investors are becoming more confident, experts say much more investment is needed to keep the economy growing and to stop relying so much on debt.
On Wednesday, the Pakistani rupee improved slightly against the US dollar, closing at Rs278.27 in the inter-bank market. The dollar weakened as investors waited for the Federal Reserve’s first meeting under new Chair Kevin Warsh, and the Japanese yen also stayed low.
Meanwhile, gold prices in Pakistan went up because of rising global prices. Locally, gold per tola rose by Rs100 to reach Rs455,236. Gold for 10 grams also increased by Rs85 to Rs389,685, according to the local jewelry association.
The jewelry association did not release gold and silver prices on Tuesday because they are protesting against raids on shops. On Monday, gold prices jumped by Rs10,800 to reach Rs455,136 per tola. Globally, gold increased by $1 to $4,328 per ounce. At the same time, silver prices fell by Rs6 to Rs7,503 per tola.
Also watch this :
