KARACHI (Special Correspondent) – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed profound concern regarding the deteriorating trade balance during the initial two months of the 2026-27 fiscal year. According to the latest data, Pakistan’s trade deficit widened by 18.1 percent to $7.1 billion, compared to $6.025 billion during the corresponding period last year.

Alarming Trade Deficit Trends

Mr. Atif Ikram Sheikh, President of the FPCCI, emphasized that while there are marginal signs of recovery in broader economic indicators, the rapid surge in imports has significantly outpaced export growth. This imbalance, he warned, presents an immediate and substantial threat to the nation’s macroeconomic stability and existing foreign exchange reserves. Mirroring concerns raised in recent policy discussions, such as those impacting integrated urban planning, the FPCCI highlighted that structural bottlenecks are stifling the potential of the local industrial sector.

Cost of Doing Business and Industrial Stagnation

The FPCCI Chief asserted that the export sector’s inability to keep pace with imports stems directly from an unsustainable cost of doing business. He noted that Pakistani industries are struggling to remain competitive against regional counterparts due to a combination of prohibitive interest rates and rising operational costs. High policy rates, maintained by the central bank, have curtailed private sector credit growth, leaving manufacturers unable to access necessary working capital or fund long-term modernization efforts.

Furthermore, the leadership identified electricity tariffs, exacerbated by massive capacity charges and cross-subsidization, as a critical failure. Similar to the challenges discussed regarding local government infrastructure, these costs effectively prevent factories from achieving the scale required for global market participation. The instability in gas supply and elevated petroleum prices have further compounded the issue, creating a multiplier effect that inflates logistics and supply chain costs.

Call for Immediate Policy Intervention

In response to these findings, the FPCCI has called upon the Prime Minister, the Ministry of Finance, the Ministry of Commerce, and the State Bank of Pakistan to engage in a formal, crisis-oriented dialogue with the business community. To prevent further industrial contraction, the organization is demanding an aggressive reduction in the policy rate, the rationalization of energy tariffs to align with regional standards, and targeted relief on petroleum levies to stabilize domestic supply chains. As emphasized by various stakeholders focused on long-term national development projects, coherent policy intervention is essential to securing the economic future of the country.