Pakistan’s trade sector is expected to grow following a new agreement with the United States. The Ministry of Finance has highlighted this positive outlook in its latest economic update.
Entering FY2026, Pakistan’s economy shows stable conditions and better growth prospects. Stronger fiscal and external positions support this improvement. Large-Scale Manufacturing (LSM) has steadily recovered since April 2025, reaching a peak in June. Growth in automotive and fertilizer production is expected to further boost trade activities.
The government’s reforms aim to encourage private sector-led growth. Measures such as easing inflation and supportive monetary policies are increasing business confidence. These factors contribute positively to the country’s trade performance.
The economic report states that the favorable global environment and rising demand from trading partners will support trade growth. The trade deal with the US is a major factor expected to increase exports. Additionally, workers’ remittances will help reduce pressures on the trade deficit caused by increased imports.
Despite these improvements, recent floods may strain fiscal resources and disrupt food supplies in some regions. Inflation is forecasted to remain between 4.0 and 5.0 percent through August 2025.
Agricultural credit increased by 16.3 percent in FY2025, and imports of agricultural machinery rose significantly. These trends support the farming sector and overall trade growth.
In June 2025, the LSM sector grew 4.1 percent year-on-year, though it faced a small monthly decline. The current account deficit shrank to $254 million in July FY2026 from $348 million last year. Goods exports rose 16.2 percent to $2.7 billion, while imports increased 11.8 percent to t$5.4 billion.
Worker registrations for overseas employment also increased by 23.9 percent in July 2025, adding another positive dimension to Pakistan’s trade and economic outlook.
Overall, Pakistan’s trade prospects are strengthening due to the new US deal and ongoing economic improvements.
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