FPCCI warns widening trade deficit threatens macro stability
The Federation of Pakistan Chambers of Commerce and Industry says the 18% rise in the trade deficit to $7.1 billion is driven by soaring import costs, high energy tariffs and the central bank’s policy rate, putting pressure on export‑oriented manufacturers.
Share
Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Export‑oriented sectors such as Cement, Steel and Textile face higher costs and widening trade deficit, so avoid buying related stocks.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- CementNegatively affected
- SteelNegatively affected
- TextileNegatively affected
- EconomyNegatively affected
- MarketsNegatively affected
Companies
Companies Mentioned
- INDU· Negatively affected · Do not buy
Mentions in This Briefing
Sectors: Cement, Steel, Textile, Economy, Markets — Negative · Do not buy. PSX tickers: INDU. Export‑oriented sectors such as Cement, Steel and Textile face higher costs and widening trade deficit, so avoid buying related stocks.
Full Story
Open on Dawn## FPCCI highlights sharp trade‑deficit expansion
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh warned that Pakistan’s trade deficit widened by 18.1 % in the first two months of FY 2027, reaching $7.1 billion versus $6.025 billion a year earlier.
## Export growth lagging behind import surge
While overall economic activity shows a modest rebound, export growth has been far outpaced by a jump in imports. Sheikh attributes the gap not to a lack of capacity but to the “crippling cost of doing business.”
## Energy costs and policy rate as key bottlenecks
He singled out the State Bank of Pakistan’s high policy rate as a barrier to credit, noting that manufacturers cannot earn margins sufficient to service expensive loans. Rising electricity tariffs—driven by capacity charges and cross‑subsidisation—have also made it unviable for factories to expand output. Gas supply disruptions and high petroleum prices further inflate logistics costs, eroding exporters’ profit margins.
## Call for immediate policy relief
Sheikh urged the Prime Minister, the Ministry of Finance, the Ministry of Commerce and the State Bank to meet the business community urgently. He demanded a rapid cut in the policy rate, rationalisation of electricity and gas tariffs to regional levels, and targeted relief on petroleum levies for transport to lower domestic supply‑chain costs.
## Potential impact on listed manufacturers
If the concerns are not addressed, export‑focused companies in cement, steel, textile and related industrial sectors could see reduced earnings and tighter margins, which may weigh on their share performance on the PSX.