Key Points
- Trade deficit widens to $3.7bn in December on higher imports
- Imports rise sharply, outpacing export growth
- Full-year external account pressures remain elevated
ISLAMABAD: Pakistan’s trade deficit widened by 24 per cent year-on-year to $3.7 billion in December 2025, driven by a sharp increase in imports that outpaced modest export growth, according to data released by Pakistan Bureau of Statistics (PBS).
The deterioration comes amid a gradual recovery in domestic economic activity and stabilisation measures agreed with international lenders, which have lifted import demand but kept exports under pressure.
The higher gap reflects continued pressure on the country’s external account, as rising demand for energy, machinery, and consumer goods lifted the import bill during the month. Analysts say the trend underscores the challenge facing policymakers as economic activity picks up amid efforts to stabilise the balance of payments.
Exports posted limited growth compared to December last year, weighed down by weaker global demand and price pressures in key markets, particularly for textiles, Pakistan’s largest export sector. Imports, however, rose at a faster pace, supported by higher volumes and elevated international commodity prices.
On a month-on-month basis, the trade deficit also increased compared to November, indicating sustained import momentum despite currency management measures and administrative curbs aimed at containing non-essential inflows.
Economists caution that persistent trade imbalances could complicate efforts to rebuild foreign exchange reserves, even as remittances and multilateral inflows provide partial support to the external account.
