Amidst rising import bills and faltering export momentum, Pakistan’s trade deficit continues to swell, casting a long shadow over the country’s economic stability.
The latest data from the Pakistan Bureau of Statistics (PBS) for April and May 2025 paints a worrying picture: ballooning import volumes, shrinking export figures, and a trade imbalance reaching its highest level in years. Despite the cushion of growing remittances and a modest uptick in cumulative exports, the country’s balance of payments remains under acute strain—threatening to unravel fragile gains in external account management.
In a flicker of upward momentum amid industrial unease, Pakistan’s large-scale manufacturing (LSM) sector eked out a 2.29 percent year-over-year expansion for April 2025, as unveiled by recent figures—offering a rare glint of revival within a largely beleaguered economic matrix. Yet, this tentative elevation masks a more disconcerting truth: from July through April in FY2024-25, the broader LSM terrain dwindled by 1.52 percent. Chronic hindrances across pivotal sectors—ranging from alimentary production to chemical synthesis, mechanical apparatuses, and ferrous metallurgy—continue to choke industrial resurgence. Compounding the concern, a sequential month-on-month downturn of 3.2 percent was registered in April alone, amplifying apprehensions about the resilience of manufacturing dynamics.
As a cornerstone of the national economic edifice, LSM encapsulates nearly 67.5 percent of the country’s total manufacturing output and injects approximately 8 percent into the gross domestic product (GDP). Juxtaposing April 2025 against the same month the prior year reveals grim erosions across major manufacturing echelons. The iron and steel crucible contracted by 1.82 percent, mechanical and engineering outputs collapsed by a staggering 50.7 percent, while garments (wearing apparel) receded 8.55 percent. Chemical manufacturing, too, endured a 1.3 percent decline, with chemical products alone plummeting by a punishing 10.78 percent. Other collapses included a 0.14 percent fall in fabricated metalware, furniture manufacturing freefalling by 40.3 percent, and football (sports goods) production nosediving 41.5 percent year-over-year.
Amidst the erosion, bright spots glimmered. Textiles surged 7.9 percent, vehicular production catapulted by 60.2 percent, and pharmaceuticals lifted by 7.5 percent. Leather goods etched out a modest 1.8 percent rise, while cement ascended by 3.6 percent. In auxiliary sectors, coke and petroleum goods edged up 5.54 percent, computer and optical instruments climbed 5.13 percent, and food and beverage manufacturing registered 3.47 percent and 4.27 percent hikes respectively. Notably, sugar production ballooned by an astronomical 184 percent. Cotton yarn spun an 8.66 percent increase, tobacco swelled by 9.1 percent, fertilizers expanded 5.07 percent, and cotton cloth trickled up 0.74 percent.
Turning to the external trade vista, Pakistan’s exports inched upward by 5.15 percent during the initial eleven months (July–May) of FY2024-25—reaching $29.564 billion, a discernible rise from the $28.117 billion logged during the same stretch last year. Imports, too, recorded a substantive escalation—up 7.50 percent to reach $53.55 billion from the previous year’s tally of $49.815 billion. In May 2025, outbound shipments climbed to $2.672 billion, marking a robust 22.91 percent year-over-year lift from $2.174 billion in May 2024. In contrast, imports fell by 5.77 percent month-on-month to $5.273 billion from April’s $5.596 billion, yet this still reflected a 7.28 percent climb over the $4.915 billion reported in May of the prior year.
However, compared to the preceding month, May’s exports tumbled by 5.88 percent from $2.839 billion, reflecting market fragility. The linchpins of export revenue in May 2025 included knitwear at Rs123.121 billion, readymade garments at Rs105.420 billion, and bed linen items valued at Rs75.937 billion. Rice and derivatives fetched Rs50.707 billion, cotton cloth Rs38.147 billion, towels Rs25.939 billion, while miscellaneous home textiles (excluding towels and bedding) reached Rs19.895 billion. Other notables were basmati rice (Rs16.682 billion), seafood and derivatives (Rs15.908 billion), and cotton yarn (Rs11.976 billion).
In summary, despite selective upticks and sectoral rallies, the industrial and trade architecture remains ensnared in volatility. A nuanced recalibration of policy and stimulus, perhaps, is required to unlock sustained momentum in Pakistan’s industrial heartland.
April’s deficit expanded by 55.2% compared to March, largely due to dwindling exports and concurrently ballooning imports. Exports in April nosedived to $2.14 billion—a staggering 19.05% drop month-on-month and 8.93% slide year-on-year. Conversely, imports soared to $5.53 billion, marking a 14.52% monthly increase and a 14.09% rise over the previous year. This disproportionate dynamic inflated the monthly deficit by over $1.2 billion. Translated into rupee terms, Pakistan’s April 2025 exports amounted to Rs601.4 billion, while import expenditure surged to Rs1.55 trillion, culminating in a colossal Rs952 billion deficit. This stark divergence, in dollar terms, illustrates a 55.2% expansion in the trade shortfall over March.
Reviewing the cumulative narrative of the first ten months (July–April) of FY2024–25, the data narrates a deepening trade conundrum. Exports rose modestly to $26.86 billion—a 6.25% year-over-year climb—while imports swelled to $48.21 billion, representing a 7.37% increase. The resulting gap stood at $21.35 billion, up 8.81% from the analogous period in the preceding fiscal year.
The trend reached a critical inflection in April 2025. The $3.4 billion trade deficit—anchored in a perilous cocktail of export attrition and import escalation—marked the highest monthly imbalance since August 2022. Exports tumbled 8.9% YoY and 19.1% MoM to $2.1 billion, while imports surged 14.1% compared to April 2024 and 14.5% over the previous month, cresting at $5.5 billion—the loftiest figure since the aforementioned benchmark.
Cumulative exports hit $26.9 billion—up 6.3% YoY—whereas imports ballooned to $48.2 billion, a 7.4% uptick. This widened the trade gap to $21.4 billion, reflecting an 8.8% expansion from FY24. The persistent uptick in imports juxtaposed with stifled export performance underscores intensifying external sector fragilities and an urgent need for corrective macroeconomic recalibration.
Pakistan’s external trade trajectory is veering toward a critical juncture. The disproportionate rise in imports against a backdrop of declining exports has widened the trade deficit to levels not seen since 2022, underscoring structural weaknesses in the economy. With the current account balance once again showing signs of chronic stress, urgent policy recalibration is imperative. Without targeted interventions to bolster export competitiveness, reduce energy-related import dependency, and stabilize external inflows, Pakistan risks deepening its vulnerability to global shocks and undermining prospects for sustained economic recovery.