Pakistan’s trade deficit widened to $12.6 billion during the first four months of the current fiscal year, a $3.5 billion increase compared to the same period last year, as imports surged to their highest level in over three and a half years.
According to data released by the Pakistan Bureau of Statistics (PBS), imports in October 2025 amounted to $6.1 billion, the highest monthly figure since March 2022. For the July-October period, the total value of imports reached $23 billion, a 15.1% year-on-year increase.
According to a news report, imports during these four months were more than double the value of exports, which stood at $10.5 billion, down 4% from the same period last year. This spike in imports has been attributed to several factors, including lower duties on non-dutiable goods, a result of the government’s trade liberalization efforts in collaboration with the World Bank and the International Monetary Fund (IMF).
The increase in imports has raised concerns among economists, especially as the deficit has grown by 38% compared to the same period last year. Notably, the $3.5 billion increase in the trade gap is equivalent to half of the IMF loan that Pakistan expects to receive after fulfilling 50 conditions over the next three years.
Meanwhile, exports have remained sluggish, with a decline of 4% in October alone, continuing the trend of falling exports for the third consecutive month.
The government has committed to a 52% reduction in import taxes over five years under the IMF program, with the first phase already implemented in July. However, this liberalization is not yet yielding the expected increase in exports, adding pressure to Pakistan’s foreign exchange reserves.
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