Islamabad: Pakistan’s merchandise exports increased in the first quarter of the financial year, but faster growth in imports widened the trade deficit to USD 10.79 billion, according to Pakistan Bureau of Statistics figures reported on Friday.

Exports reached USD 8.43 billion in July to September, rising 10.84 percent from USD 7.59 billion a year earlier.

Imports grew 13.21 percent to USD 19.22 billion over the same period. The trade gap consequently widened 15.13 percent from USD 9.37 billion.

September brought stronger export performance, with shipments rising 17.61 percent from a year earlier to USD 2.94 billion. Exports also increased 16.07 percent compared with August.

However, September’s import bill reached USD 6.49 billion, leaving a monthly merchandise trade deficit of USD 3.55 billion, up 6.15 percent from a year earlier.

The quarterly improvement follows a difficult financial year for exporters. Merchandise exports fell 5.97 percent to USD 32.04 billion in FY26 and missed the annual target by USD 4.87 billion.

Jawed Bilwani, coordinator of the All Pakistan Exporters Association Forum, said high manufacturing costs, weak competitiveness and delayed tax refunds continued to put pressure on businesses.

He also cited narrow profit margins, taxation, disputed Federal Board of Revenue (FBR) deductions and liquidity constraints as obstacles to export growth.

The sector has faced additional shipping and supply chain pressures linked to the Middle East conflict and disruption around the Strait of Hormuz. Trade with Afghanistan has also been affected by the suspension of exports since October 2025, according to the report.

The latest figures show export earnings recovering, particularly in September, while the larger import bill continues to outweigh those gains. The merchandise trade deficit measures goods trade and is separate from Pakistan’s broader current account balance.