Mian Zahid Hussain Raises Alarm Over Trade Deficit Surge

KARACHI: Mian Zahid Hussain, a prominent figure in Pakistan’s business community, has expressed significant concern regarding the widening trade deficit, which he claims poses a major threat to the country’s economic stability. The trade deficit for the first quarter of fiscal year 2026 has increased by 32.9% year-on-year, reaching $9.37 billion, reversing prior improvements.

In his address to the business community, Hussain pointed out that imports have risen by 13.5% to $16.97 billion, while exports have decreased by 3.8% to $7.6 billion. This reflects the challenges posed by high input and energy costs. The services trade deficit also saw a rise of 21.9% compared to the previous year, amounting to $437 million in August 2025.

Hussain highlighted the pressure that this growing trade deficit is placing on Pakistan’s foreign exchange reserves, which are now sufficient to cover only about three months of imports. He emphasized that if the current trend continues, it will significantly strain the State Bank’s capacity to maintain sufficient external buffers.

To address these issues, Hussain urged the government to implement immediate measures. These include significantly reducing non-essential imports and supporting exporters who are facing increasing costs. He also stressed the importance of reducing energy costs for export industries to ensure the nation’s economic survival and growth, which is crucial for generating the foreign exchange needed to mitigate the rising trade deficit.