Islamabad, April 3, 2025 – Pakistan has reported an increase in its trade deficit, which widened to $17.90 billion during the first nine months (July – March) of the fiscal year 2024-25.
The growing trade deficit highlights the ongoing challenges in balancing the country’s external accounts amid fluctuating global economic conditions.
According to data released by the Pakistan Bureau of Statistics (PBS) on Thursday, the trade deficit expanded by 4.50% in the first nine months of the current fiscal year compared to a deficit of $17.13 billion in the same period of the previous year. The widening gap is driven by increased imports despite a moderate rise in exports.
During the July-March period of FY25, Pakistan’s exports grew by 7.69%, reaching $24.69 billion, compared to $22.93 billion in the corresponding period last year. However, the country’s import bill also surged by 6.33%, climbing to $42.59 billion from $40.05 billion a year earlier. The rise in imports has contributed significantly to the increasing trade deficit.
Market analysts predict that Pakistan’s import bill may continue to rise in the coming months due to growing demand for imported raw materials, fueled by an uptick in industrial and economic activity. The recent decision by the government to slash electricity tariffs is expected to benefit industries by lowering production costs, potentially boosting exports in the long run. However, concerns persist regarding exports, especially after the United States announced new trade tariffs that could impact global commerce.
On a year-on-year (YoY) basis, Pakistan’s trade deficit narrowed by 7.39% in March 2025, reaching $2.12 billion compared to $2.29 billion in the same month of the previous year. While exports rose by 1.95%, imports declined by 2.45% on a YoY basis.
Similarly, on a month-on-month (MoM) basis, the trade deficit contracted by 7.83% to $2.12 billion in March 2025, down from $2.30 billion in February 2025. Exports recorded a 5.10% increase, while imports fell by 1.11%.
As Pakistan navigates its economic challenges, policymakers are expected to focus on strategies to boost exports and control imports to manage the growing trade deficit effectively.