Pakistan’s trade deficit surged by 9% year-on-year (YoY) in fiscal year 2024-25 (FY25), reaching $26.3 billion, according to data from the Pakistan Bureau of Statistics (PBS). This compares to $24.1 billion recorded in FY24, indicating continued pressure on the country’s external account, despite modest improvements in exports.
Exports in FY25 grew by 4.7% to $32.1 billion, up from $30.7 billion a year earlier. However, this growth was not strong enough to offset the faster rise in imports. Analysts at Topline Securities noted that while the export increase is positive, sustainable double-digit export growth is unlikely without energy cost reforms, political stability, and improved global competitiveness.
Imports rose by 6.6%, reaching $58.4 billion, compared to $54.8 billion in FY24. Higher global commodity prices, increased demand for industrial inputs, and a slight recovery in domestic consumption are believed to be key drivers behind this rise. This increasing import bill has widened the trade imbalance, putting further strain on foreign exchange reserves and the current account.
Looking at June 2025 specifically, the trade deficit showed a YoY decline of 3.4%, standing at $2.3 billion compared to $2.4 billion in June 2024. Imports dropped by 2% to $4.86 billion, while exports saw a small dip of 0.6% to $2.54 billion. The slight narrowing of the monthly deficit was largely due to import control measures and lower oil prices during the month.
On a month-on-month (MoM) basis, the improvement was more visible. The June 2025 trade deficit dropped by 9.5% from $2.57 billion in May, offering some short-term relief. However, economists warn that without deeper export diversification and import substitution strategies, Pakistan may continue facing external sector vulnerabilities in the coming quarters.