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Pakistan’s trade deficit showed a modest improvement in February 2025, though the country continues to grapple with rising imports and falling exports, according to the latest trade data from the Pakistan Bureau of Statistics (PBS).
The trade figures for February, compared with January 2025, reveal a sharp decline in exports. In Rupee terms, exports dropped from 682,029 million to 822,410 million, reflecting a decrease of 17.07%. In US Dollars, the export value fell from $2.439 billion to $2.951 billion, a 17.35% decline. This significant drop in exports is attributed to challenges faced by local exporters, including rising production costs and weakening demand in global markets.
On the other hand, imports saw an upward trend. The value of imports rose from 1,324,664 million Rupees to 1,465,107 million Rupees, marking an increase of 9.59%. In U.S. Dollars, imports increased from $4.738 billion to $5.258 billion, which represents a 9.89% rise. This growing reliance on foreign goods is further stretching Pakistan’s already strained economy, particularly its foreign exchange reserves.
Despite the rise in imports, the trade deficit, or the gap between imports and exports, showed only a slight change. The deficit for February 2025 stood at 642,697 million Rupees, a small increase from the previous month’s deficit of 642,635 million Rupees. This resulted in a minimal percentage change of 0.01% in Rupee terms and 0.35% in US Dollar terms. While the deficit remains significant, the marginal change suggests that the gap may be stabilizing, though challenges remain.
When comparing February 2025 with February 2024, the yearly trends reflect a more positive development. Exports fell from 721,064 million Rupees to 682,029 million Rupees, a decline of 5.41%, but the trade deficit improved substantially by 33.59%. It dropped from 642,635 million Rupees in February 2024 to 481,053 million Rupees in February 2025. Despite the decline in exports, the reduction in the trade deficit indicates some improvement in balancing the country’s trade account.
However, the rise in imports continues to be a concern, with imports climbing by 10.19% year-on-year, from 1,202,117 million Rupees in February 2024 to 1,324,664 million Rupees in February 2025. This increasing dependence on foreign goods is a key issue that policymakers will need to address.
Looking at the cumulative trade data for the year, the trends remain mixed. Exports in Rupee terms have risen from 5,802,467 million to 6,129,888 million, a 5.64% increase. However, the value of exports in US Dollars has dropped from $ 22.022 billion to $20.359 billion. Imports have also increased by 4.91% in Rupee terms, reaching 10,523,385 million Rupees. These rising imports continue to put pressure on Pakistan’s economy.
The overall trade deficit, though still significant, showed a slight improvement in US Dollar terms. The deficit narrowed by 6.33%, from $15.780 billion to $14.840 billion, signaling a modest reduction.
Despite this slight improvement, experts warn that Pakistan needs to focus on boosting exports while addressing its import dependency. The country’s economy faces ongoing challenges, with the trade deficit remaining a key concern. Strategic reforms, including measures to enhance local production and diversify exports, will be crucial for improving Pakistan’s long-term trade balance.
The data also noted that February 2025 figures were still subject to final adjustments, further reflecting the complexities of managing trade data. While the trade deficit’s modest improvement is encouraging, Pakistan’s policymakers will need to remain vigilant to ensure the country’s economic stability.
