Pakistan’s trade deficit with Saudi Arabia falls 18.4pc to $471m in two months

ISLAMABAD: Pakistan’s trade deficit with Saudi Arabia declined by 18.37 percent to $471 million during the first two months of the current fiscal year, mainly due to a significant fall in imports from the Kingdom despite a modest decline in Pakistani exports.

According to government sources, Pakistan’s trade deficit with Saudi Arabia stood at $577 million during July-August of the previous fiscal year, which means the deficit narrowed by around $106 million during the corresponding period of the current fiscal year.

Pakistan’s exports to Saudi Arabia amounted to $98 million during July and August 2026, compared with $102 million in the same period of the previous fiscal year. This represents a decline of $4 million, or 3.92 percent, in Pakistani exports to the Kingdom.

The decline in exports indicates that the improvement in Pakistan’s bilateral trade balance during the first two months of the fiscal year was not driven by stronger export performance. Instead, the reduction in the trade gap was primarily associated with lower imports from Saudi Arabia.

According to the available trade figures, imports from Saudi Arabia during July-August 2026 stood at around $569 million, compared with approximately $679 million during the same period last year. This represents a reduction of about $110 million, or nearly 16.2 percent.

The sharper decline in imports compared with exports resulted in a substantial contraction in the overall trade deficit between the two countries. However, Pakistan continued to record a sizeable trade imbalance with Saudi Arabia during the period under review, with imports remaining several times higher than exports.

The trade figures highlight the continued imbalance in Pakistan’s merchandise trade with the Kingdom. While Pakistani exporters have access to the large Saudi market, the value of goods imported from Saudi Arabia remains considerably higher than Pakistan’s exports to the country.

The decline in Pakistani exports during the period also indicates that the improvement in the trade balance cannot yet be linked to an expansion in Pakistan’s export footprint in Saudi Arabia. A sustained improvement on the export side would require stronger growth in Pakistani products and greater market penetration in the Kingdom.

Saudi Arabia is an important trading partner for Pakistan and a major source of imports, while the Kingdom also remains a significant market for Pakistani goods. Changes in bilateral trade flows therefore have a direct bearing on Pakistan’s external trade position.

The latest figures show that the bilateral trade gap narrowed despite a contraction in Pakistan’s exports, as the decline in imports was substantially larger. The $110 million reduction in imports during the first two months was more than 27 times the $4 million fall in exports over the same period.

The figures also suggest that the immediate improvement in the trade balance has come through a reduction in the import bill rather than an increase in export earnings. For Pakistan, a sustain