Pakistan’s trade deficit widens despite surge in exports

ISLAMABAD: There’s finally some good news on the economic front for Pakistan, as the country’s exports saw a solid boost during the first half of the fiscal year 2024-25.

According to the Pakistan Bureau of Statistics (PBS), exports grew by 10.52 per cent, totalling $16.561 billion between July and December. This is a positive jump compared to the $14.985 billion recorded during the same period last year.

However, this growth in exports wasn’t enough to counterbalance the rising tide of imports, leading to a growing trade deficit. In December 2024 alone, the trade deficit widened significantly—by 46.61 per cent compared to the previous month and 34.80 per cent compared to December 2023.

For the first half of the fiscal year, the overall trade deficit crept up by 0.18 per cent, standing at $11.172 billion, just a notch higher than last year’s $11.152 billion.

On the import side, Pakistan saw a rise of 6.11 per cent in the first six months of this fiscal year, with imports totalling $27.733 billion, up from $26.137 billion in the same period last year. The increased demand for imported goods is part of what’s driving the widening gap in the country’s trade balance.

December 2024 was a mixed bag. While exports saw a small increase of 0.67 per cent, reaching $2.841 billion—up slightly from $2.822 billion in December 2023—imports surged by a hefty 14.02 per cent, hitting $5.285 billion compared to $4.635 billion last year.

This increase in imports outpaced the modest export growth, leading to a larger trade deficit for the month.

On a month-to-month basis, the trade deficit also ballooned. December’s trade gap shot up by 46.61 per cent, climbing to $2.444 billion from $1.667 billion in November 2024.

Exports for the month were almost flat, with a slight increase of 0.28 per cent to $2.841 billion from November’s $2.833 billion. However, imports jumped by 17.44 per cent, totalling $5.285 billion in December, compared to $4.500 billion in the previous month.

While it’s encouraging to see exports on the rise, Pakistan’s growing appetite for imports continues to be a challenge, deepening the trade deficit. This increasing gap could place further strain on the country’s fragile economy, especially as it navigates various financial pressures.

The road ahead will require a fine balance between boosting exports and managing imports to stabilise the trade deficit.

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