Pakistan’s trade deficit expanded sharply to US$3.3 billion in September 2025, representing a 46% increase compared to the same month last year and a 16% rise from August, according to the latest data released by the Pakistan Bureau of Statistics (PBS). The widening deficit reflects a combination of declining exports and rapidly growing imports, highlighting ongoing challenges for the country’s external sector.
Exports in September fell 12% year-on-year (YoY) to US$2.5 billion, despite a slight 4% month-on-month (MoM) recovery. In comparison with the corresponding period last year, Pakistani exporters shipped US$332 million less in goods and services. Analysts attribute this decline to sluggish global demand, rising production costs, and logistical challenges that have affected the competitiveness of Pakistan’s export sectors, including textiles, agriculture, and manufacturing.
Meanwhile, imports surged 14% YoY and 11% MoM, reaching US$5.8 billion in September 2025. The monthly import bill increased by US$517 million compared to August. The rise in imports was primarily driven by oil and petroleum products, machinery, and raw materials, reflecting both domestic consumption needs and industrial requirements. The widening gap between imports and exports has intensified pressure on Pakistan’s balance of payments and foreign exchange reserves.
The cumulative trade deficit for the first quarter of fiscal year 2026 (July-September 2025) has reached US$9.4 billion, up 33% from US$7.0 billion in the same period last year. Economists warn that such persistent trade imbalances could complicate efforts to stabilize the economy, increase reliance on external financing, and strain government reserves.
Experts argue that addressing the growing trade gap requires a combination of export promotion and import rationalization strategies. Increasing industrial competitiveness, diversifying export markets, and incentivizing value-added production are critical for reversing the declining export trend. On the import side, careful monitoring of non-essential goods and promoting domestic alternatives could help reduce pressure on foreign exchange reserves.
The trade deficit’s rapid expansion also underscores the importance of foreign direct investment and international financial support. Policy measures to attract sustainable investment in export-oriented industries and infrastructure could help mitigate short-term imbalances while fostering long-term economic resilience. Financial analysts emphasize that the government’s approach to managing imports, enhancing exports, and stabilizing currency markets will be decisive in determining Pakistan’s economic trajectory in the coming months.
The data signals a crucial juncture for Pakistan’s policymakers, businesses, and financial institutions. Coordinated efforts between the public and private sectors will be essential to address structural trade challenges, enhance competitiveness, and ensure that the country’s external accounts remain sustainable.
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