ISLAMABAD: Pakistan’s trade deficit widened to $2.44 billion in December 2024, a year-on-year increase of 35 percent and the highest level since April, Pakistan Bureau of Statistics (PBS) data released on Wednesday showed. According to the count.
The widening deficit was mainly due to a sharp rise in imports, which hit a 27-month high.
Exports for December stood at $2.84 billion, reflecting a modest 0.67 percent year-on-year increase, while imports reached $5.285 billion, registering a 14 percent year-on-year increase. A month-on-month (MoM) comparison showed a 47 percent widening of the trade deficit from November’s $1.667 billion, as imports rose 17.4 percent while exports remained almost stagnant with a marginal increase of 0.28 percent.
Exports showed a slight acceleration, reaching $2.841 billion in December from $2.833 billion in November 2024. Analysts cited the decline in global demand for Pakistan’s key exports, such as textiles, as a key factor limiting growth. In contrast, imports skyrocketed, the highest since September 2022 at $5.28 billion in December, driven by rising demand for essential goods and raw materials.
The trade deficit for the first half of the fiscal year 2024-25 (July-December) stood at $11.17 billion, a marginal increase of 0.18 percent over the same period last year. During this period, exports increased by 11% to $16.56 billion while imports increased by 6.1% to $27.7 billion.
While first-half trade data indicate stability, December’s hefty import bill threatens to unravel the fragile balance. “Rising import momentum is concerning, especially when paired with slower export growth,” warned a senior economist.
The widening trade gap poses challenges for Pakistan’s policymakers, who are grappling with multiple economic pressures.
Experts recommend targeted measures to increase exports, such as diversifying export products and exploring new markets. “Without a strategic focus on improving export competitiveness, trade imbalances will continue to weigh on the economy,” an industry analyst said.
Policymakers must find ways to strike a balance between maintaining essential imports and curbing the trade deficit, a key driver of external account risks.
PBS also reported trade in services for July-November of the current fiscal year. The services sector, which includes information technology, financial services and professional consulting, is particularly poised for growth in global markets. offers possibilities.
Pakistan’s trade deficit in services showed signs of improvement during the first five months (July-November) of fiscal year 2024-25, narrowing to $1.15 billion, compared to a deficit of $1.257 billion year-on-year. (YoY) down 8.5%. same period last year.
The improvement was driven by services exports at $3.27 billion, up 7.6 percent from $3.04 billion in the same period last fiscal. Imports of services, meanwhile, stood at $4.425 billion, up 2.9 percent from $4.3 billion recorded last year.
In November 2024, the trade deficit in services narrowed significantly to $152.9 million, a 42.4 percent decline from $265.4 million in October. The decline was driven by a 13.1 percent month-on-month (MoM) decline in imports of services, which stood at $828.6 million in November compared to $953 million in October.
On the export side, November services exports fell 1.76 percent to $675.7 million from $687.8 million in October. However, on a year-on-year basis, November exports increased by 6.5 percent from $634.4 million in November 2023, reflecting a positive trend in the performance of Pakistan’s services sector.
A year-on-year comparison to November 2024 shows a 4.6 percent increase in services imports, rising to $828.6 million from $792 million in November 2023. Despite this increase, continued growth in exports indicates improving performance in the services sector, which is critical to Pakistan’s diversification. Economic portfolio beyond traditional commodity exports.
A senior trade analyst said the steady improvement in services exports is encouraging but strategic investment is needed to further expand the sector.