Pakistan’s merchandise trade deficit reached $2.44 billion in December 2024, marking a 35% year-on-year increase and the highest level since April. This rise in the deficit was largely due to a significant surge in imports, which hit a 27-month high.
Exports for December totaled $2.84 billion, showing a modest 0.67% year-on-year increase. In contrast, imports soared to $5.28 billion, reflecting a 14% year-on-year rise. The trade deficit jumped 47% compared to November, as imports rose by 17.4%, while exports showed only a slight 0.28% growth.
Pakistan’s export sector faced challenges, especially in textiles, with global demand remaining subdued. Meanwhile, the import bill surged, driven by increased demand for essential commodities and raw materials. The December import figure was the highest since September 2022.
For the first half of fiscal year 2024-25 (July-December), the trade deficit stood at $11.17 billion, a slight increase from the previous year. While exports saw an 11% rise to $16.56 billion, imports increased by 6.1%, reaching $27.7 billion.
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Experts warn that the growing import bill and sluggish export performance could put further strain on Pakistan’s economy. Policymakers must adopt targeted strategies to boost exports, such as diversifying products and exploring new markets.
In contrast to the merchandise trade deficit, Pakistan’s services trade showed improvement. The services trade deficit narrowed to $1.15 billion in the first half of FY 2024-25, driven by a 7.6% rise in services exports. Despite a slight dip in services exports in November, the overall growth in the sector indicates potential for further diversification of Pakistan’s economic base.
Experts emphasize the importance of strategic investment to continue expanding the services sector and improving the country’s overall trade performance.
