**ISLAMABAD:** Pakistan’s economic interactions with the Middle East are increasingly marked by a notable trade imbalance, with the deficit escalating to $11.731 billion in the first ten months of the current fiscal year (July–April FY25). This represents a 9.89% increase over the $10.675 billion recorded in the same period last year.
At the heart of this widening gap is a rise in energy imports, particularly crude oil. Data from the State Bank of Pakistan shows that crude oil imports increased by 14.9%, contributing to an overall rise in imports from the region, while exports trailed behind. This surge in consumption is reversing the progress made in FY24, when the trade deficit with the Middle East had narrowed by 20.47%, largely due to reduced consumption prompted by domestic price hikes.
### Imports Again Exceed Exports
In the initial ten months of FY25, imports from the Middle East climbed by 8.76%, reaching $14.355 billion, compared to $13.198 billion the previous year. In contrast, exports to the region experienced only a 4% increase, totaling $2.624 billion against $2.523 billion last year.
This contrasting trend comes on the heels of FY24 data, where imports had dropped by 13.53% to $16.16 billion, while exports soared by 35.23%, rising to $3.155 billion from $2.33 billion.
To address the growing trade deficit, Pakistan has recently entered into a free trade agreement with the Gulf Cooperation Council (GCC). This move is seen as part of a broader strategy to recalibrate trade relations with key partners in the region.
### Export and Import Performance by Country
**Saudi Arabia**
– Exports increased by 4.49% to $605.39 million during the first ten months of FY25.
– In FY24, exports surged by a noteworthy 40.98%, totaling $710.335 million.
– Imports from Saudi Arabia declined by 16.26% to $3.176 billion in the same period.
– In FY24, there was a minor drop of 0.01% in imports, which settled at $4.49 billion.
**United Arab Emirates (UAE)**
– Exports grew by 8.67% to $1.779 billion from July to April FY25.
– FY24 data showed a significant 41.15% increase to $2.082 billion, driven by demand from Dubai.
– Key exports include rice, bovine carcasses, men’s and boys’ cotton garments, guavas, and mangoes.
– Imports from the UAE rose dramatically by 30.81%, reaching $6.614 billion.
**Qatar**
– Exports dropped by 27.87% to $100.51 million during the first ten months of FY25.
– Imports, on the other hand, rose by 7.83% to $2.933 billion.
**Kuwait**
– Exports fell by 10.84% to $97.59 million.
– Imports saw a slight decrease of 1.69%, totaling $1.453 billion.
**Bahrain**
– Exports sharply declined by 28.66% to $41.93 million.
– Imports increased by 18.37%, reaching $179.41 million.
Despite some improvements in exports, particularly to crucial markets like the UAE and Saudi Arabia, the pace remains insufficient to mitigate the heavy burden posed by escalating oil imports. With the trade deficit surpassing $11.7 billion and a significant tilt toward imports, especially in petroleum, Pakistan’s trade imbalance with the Middle East continues to be a major concern for policymakers, despite recent diplomatic and economic efforts.
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