Pakistan’s trade deficit soars to three-year high in April

Pakistan's trade deficit in goods surged by 36% in April, reaching $3.38 billion, compared to $2.49 billion in the same month last year. This marks the highest monthly trade deficit recorded in the past three years.

Exports failed to pick up while trade deficit keeps on widening a big challenge for the economy.

According to official figures, exports fell to $2.14 billion, a decline of 8.93% from $2.35 billion in April 2024. Meanwhile, imports rose sharply by 14.09%, hitting $5.52 billion compared to $4.84 billion in the same period last year.

Analysts attribute the surge in imports to increased purchases of petroleum products, palm oil, along with potentially higher imports of automobiles and completely knocked-down (CKD) auto units.

For the first ten months of the fiscal year, Pakistan’s trade deficit in goods stood at $21.35 billion, reflecting an 8.8% increase from $19.62 billion in the corresponding period last year.

In its semi-annual State of Economy report, State Bank of Pakistan (SBP) has projected country’s goods import at $58-59 billion and exports at $31.5-32.5 billion for FY25.

Economists warn that the widening trade gap could put further pressure on Pakistan’s already strained foreign exchange reserves, prompting concerns over economic stability and import-driven inflation.