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KARACHI: The trade gap widened alarmingly by over 18 per cent in the first two months of 2026-27, reflecting the increasing pressure of a surging import bill. The Pakistan Bureau of Statistics (PBS) data, issued on Thursday, showed that the trade deficit for July-August FY27 swelled to $7.1 billion as imports grew more sharply than exports. The trade gap stood at $6.03bn in 2MFY26. The trend mirrors last year's pattern, with an aggressively widening trade gap that would ultimately eat up all remittances. The trade deficit in FY26 was $39.5bn against remittances of $41.5bn. The swelling deficit could pose major risks for the country, already under pressure to pay over $26bn in external debt servicing in the current fiscal year. However, the trade gap narrowed by 19.7pc to $3.17bn in August from $3.95bn in July. The decline appears to be an improvement, but the deficit remains much higher than last year. In FY26, the current account finally ended with a deficit of $139m; though the amount was negligible, it was only possible due to unprecedented inflows of $41.5bn in remittances. During the first two months of the current fiscal year, imports grew by 13pc to $12.58bn, compared with $11.13bn in 2MFY26. Higher costs for oil and other imports, such as food, due to the Gulf war have added to economic challenges for Pakistan. On a year-on-year basis, the country's exports increased by 7pc to $5.46bn in July-August compared to $5.10bn a year ago. In August, however, imports fell 17.7pc to $5.68bn, compared with $6.89bn in July, while exports fell 15pc to $2.51bn, compared with $2.95bn in July. August trade deficit swelled 10.4pc year-on-year. Published in Dawn, September 4th, 2026 Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.