Pakistan’s Middle Eastern Trade Deficit Swells 7.37% in FY25 on Increased Petroleum Imports
Pakistan’s trade deficit with the Middle East registered a growth of 7.37%, rising to $13.974 billion during the fiscal year 2025 (FY25), from $13.014 billion in FY24. This is primarily contributed by the growth in petroleum imports.
As per statistics provided by the State Bank of Pakistan, this rising deficit indicates that Pakistan is dependent on Middle Eastern energy imports. In the meantime, exports to the Middle East experienced only minor increases. Crude oil imports increased by 15% in FY25, making a major contribution to the trade gap.
Compared to this, the trade deficit narrowed in FY24 by 20.47% to $13.014 billion from $16.365 billion of FY23. This resulted from declining petroleum imports, due to increased fuel prices and decreased domestic consumption.
Exports by Pakistan to the Middle East decreased by 1.52%, amounting to $3.107 billion in FY25 compared to $3.155 billion in FY24. This is in contrast to an increase of 35.23% in exports in FY24 when exports were $2.33 billion.
On the import side, Middle Eastern goods rose 5.64% to $17.081 billion in FY25 compared to $16.169 billion in FY24. This was after imports dropped significantly by 13.53% in FY24.
To assist in narrowing the increasing trade deficit, Pakistan recently signed a free trade agreement (FTA) with the Gulf Cooperation Council (GCC) nations. The agreement is meant to enhance exports and expand trade relations with the region.
Trade with each of the Middle Eastern nations reported a mixed bag. Export to Saudi Arabia decreased by 0.84%, standing at $704.32 million in FY25, compared to $710.29 million in FY24. Imports from Saudi Arabia decreased by 16.6%, standing at $3.746 billion in FY25.
Exports to the United Arab Emirates (UAE) increased by 1.87%, standing at $2.121 billion, while imports from the UAE increased by 25.75%, standing at $7.958 billion.
Export to Qatar and Bahrain recorded steep declines by 28.65% and 23.36%, respectively. However, imports from Qatar and Bahrain recorded increases, with Bahrain being up by 4.54% and Qatar by 7.37%. Export to Kuwait declined by 13.87%, while imports from Kuwait recorded a decline of 6%.
