Pakistan’s external sector in late 2024 and early 2025 painted a mixed picture—while exports in certain areas showed resilience and workers’ remittances surged, a sharp rise in imports widened the trade gap.
Official data from the State Bank of Pakistan (SBP) reveals that December imports grew at a much faster pace than exports, driving up the monthly trade deficit and straining the country’s external balance. Although the fiscal year-to-date figures show a rare current account surplus, recent monthly deficits highlight the vulnerability of this improvement to fluctuating trade flows and external debt obligations.
Pakistan’s trade chasm widened dramatically by 44 percent in July 2025, as inbound shipments accelerated at nearly twice the rhythm of outbound consignments, according to figures unveiled by the Pakistan Bureau of Statistics (PBS). The data underscores a mounting strain on the nation’s external ledger at the dawn of the new fiscal cycle.
Outbound sales of goods advanced 16.9 percent year-on-year to $2.7 billion in July—marking an 8.9 percent uptick from June. Yet, imports vaulted 29.3 percent from the prior year to $5.4 billion, registering a robust 12.4 percent leap from the preceding month. This imbalance inflated the monthly trade shortfall to $2.75 billion, up from $1.91 billion a year earlier and $2.37 billion in June.
Over the full fiscal year 2024–25, the overall trade gap swelled by 9.3 percent to $26.35 billion. Within this window, exports crept upward by 4.5 percent to $32 billion, while imports surged 6.6 percent to $58.4 billion. PBS also disclosed the services ledger for July–June 2024–25, revealing that domestic enterprises procured more foreign services than they dispatched abroad. Notably, the services trade deficit contracted by 15.84 percent, narrowing to $2.62 billion from $3.1 billion the year prior.
During FY25, Pakistan engaged overseas service providers to the tune of $11 billion, while exporting services worth $8.4 billion. By contrast, in FY24, service exports tallied $7.68 billion and imports reached $10.8 billion—indicating a 9.23 percent elevation in exports and a 2.01 percent climb in imports year-on-year.
In the initial half of FY25 (July–December), merchandise exports expanded by 10.52 percent, clocking in at $16.561 billion against $14.985 billion in the comparative span of the preceding year. Imports during the same interval rose 6.11 percent to $27.733 billion from $26.137 billion. Consequently, the mid-year trade gap inched wider by a modest 0.18 percent, standing at $11.172 billion versus $11.152 billion last year.
December 2024 proved especially turbulent, as the monthly trade deficit swelled 46.61 percent from November, reaching $2.444 billion against the prior $1.667 billion. On an annual lens, the December gap expanded by 34.80 percent from $1.813 billion in the same month of 2023. Goods exports in December nudged upward by 0.67 percent year-on-year to $2.841 billion, compared with $2.822 billion a year earlier. Month-on-month, the gain was a marginal 0.28 percent, edging from $2.833 billion in November 2024.
In December, Pakistan’s imports ascended markedly by 14.02 percent year-on-year, reaching $5.285 billion compared to $4.635 billion in December 2023. On a month-to-month scale, inbound shipments leapt 17.44 percent from $4.500 billion in November 2024.
This swelling of the trade deficit underscores the unyielding challenge of reining in the imbalance between imports and exports, despite gains in several key export sectors. With imports persisting in outpacing export growth, policymakers may find it imperative to devise targeted measures to temper the widening gap in the months ahead.
Meanwhile, the State Bank of Pakistan (SBP) disclosed that the nation registered a current account surplus of $2.1 billion during the ongoing fiscal year. However, under the weight of an expanding trade deficit and elevated external debt servicing obligations, Pakistan recorded a current account deficit of $103 million in May—contrasting with a surplus of $47 million in April and $1.2 billion in March. SBP data revealed that the current account surplus in FY25 stood at $2.1 billion, a stark turnaround from the $2.1 billion deficit logged in the previous fiscal year.
Specifically, in May 2025, the current account posted a $103 million deficit, compared to a revised surplus of $47 million in April, marking a 56 percent improvement over the $235 million deficit in May 2024. The narrowing deficit was propelled by a steep rise in the import bill alongside a dip in export earnings. Cumulatively, the first eleven months of FY25 yielded a current account surplus of $1.81 billion—an emphatic reversal from the $1.57 billion deficit in the same stretch of FY24.
In goods and services trade, May 2025 exports totaled $3.15 billion, down 15 percent from $3.71 billion in the corresponding month last year. Imports for the month, however, climbed 7 percent year-on-year to $6.36 billion, as per SBP’s statistics.
Workers’ remittances in May 2025 reached $3.69 billion, reflecting a robust increase of over 13 percent from a year earlier. Modest economic expansion, persistently high inflation, and improved export performance have collectively helped restrain the current account deficit. Additionally, elevated interest rates—recently reduced—and selective curbs on imports have bolstered the authorities’ push for a leaner external financing gap.
Pakistan’s trade and current account figures underscore the delicate balancing act facing policymakers. Sustaining the current account surplus will depend on curbing import growth, bolstering exports, and managing external liabilities with precision. While higher remittances and targeted policy measures offer some breathing room, the persistence of large monthly trade gaps suggests that without structural reforms in production and trade competitiveness, the country’s external stability may remain precarious in the months ahead.