Pakistan's services exports rose by 17.38% to USD9.097 billion in the first 11 months of fiscal year 2025-26, helping shrink the services trade deficit by almost a quarter, while record technology earnings and a sharp increase in exports to China provided further signs of strengthening external sales. According to the Pakistan Bureau of Statistics, services exports increased from USD7.750 billion in July-May 2024-25. Imports of services also rose, though at the slower rate of 8.64%, reaching USD11.099 billion from USD10.338 billion a year earlier. The difference in growth rates helped reduce the services trade deficit by 24.10%, to USD2.002 billion from USD2.638 billion during the corresponding period.

May offered an even stronger picture. Services exports increased by 15.99% year on year to USD838.28 million from USD722.74 million, while imports declined by 9.41% to USD807.82 million from USD891.69 million. On a monthly basis, however, exports fell from USD904.09 million in April to USD838.28 million in May. Imports similarly decreased by 7.23%, from USD870.75 million to USD807.82 million. The services trade deficit was reported at USD30.46 million in May, down 8.63% from USD33.34 million in April. On a year-on-year basis, the deficit was reported to have fallen by 118.03%. Behind the broader expansion in services, information technology has emerged as an increasingly important source of foreign earnings. According to the State Bank of Pakistan, IT exports climbed 21% to a record USD4.6 billion in FY2025-26. The momentum continued into the final month of the fiscal year. Technology exports reached a monthly record of USD416 million in June, an increase of 12% from May and 23% from the same month a year ear lier.

The figures point to sustained expansion in software and IT-enabled services. Industry experts attributed the increase to tax relief, supportive government policies, an improved business environment and rising international demand for digital services. Freelancing provided another significant contribution. Pakistani freelancers generated more than USD1 billion in export earnings for the first time during FY2025-26, highlighting their growing role within the digital economy. The technology sector's record performance has made IT and freelancing increasingly important to policymakers seeking higher exports, foreign-exchange earnings, investment and employment. Pakistan's merchandise trade with China, meanwhile, registered a sizeable expansion during the first half of 2026. Exports to China surged by 50.7% to USD1.874 billion, compared with USD1.244 billion in the corresponding six months of 2025, according to the General Administration of Customs of China. March produced the strongest monthly performance, with shipments worth USD361.37 million. That represented an 84.1% increase from USD196.16 million in March 2025.

Agro-industrial goods were central to the increase. Sugar, bagasse and related agricultural products helped drive shipments as Pakistani suppliers expanded sales of raw materials and intermediate products to Chinese mills, distilleries and manufacturing facilities. A senior official from Pakistan's Ministry of Commerce attributed the 50.7% increase to the development of the industrial relationship between the two countries, particularly Pakistani suppliers' role in sugar processing and biomass utilisation. Financing arrangements have also become part of the trade relationship. Pakistani exporters now have access to Chinese financing mechanisms, including lease-finance facilities and extended credit terms through major commercial banks.

Taken together, the figures depict an export sector finding growth through several different channels. Services earnings are rising considerably faster than their associated imports, IT has reached record levels and shipments to China have expanded by more than half. The durability of those gains will nevertheless depend on maintaining the momentum. For now, the most consequential improvement is in services: a 17.38% increase in exports has not merely brought additional foreign earnings but has also helped reduce a persistent trade deficit, while technology and freelancing are assuming a larger role in Pakistan's export mix.