Pakistan’s trade deficit surges to $3.4 billion in April

Pakistan’s economic woes continue as the economy witnessed its trade deficit grow to a staggering $3.4 billion in April 2025. According to reports, economic experts believe that Pakistan’s overall current account balance may close in the red for fiscal year (FY) 2024-25, as Pakistan runs persistently high trade deficits.

Macroeconomic indicators exhibited signs of revival in March 2025 as Pakistan logged its largest current account surplus of $1.2 billion. For reference, the current account considers net export income, net income from abroad and net current transfers.

Cash-strapped Pakistan was only able to achieve a surplus based on the net current transfers component of the current account, which considers remittance inflows into the country. According to reports, Pakistan has witnessed a significant growth in remittance inflows, largely because of 2.4 million migrating out of the country over the last three years.

Data from the Pakistan Bureau of Statistics (PBS) paints an alarming picture, revealing falling export revenues alongside growing import bills. Pakistan’s trade deficit surged to a staggering $3.39 billion, translating into a month-on-month (MoM) deficit growth of 55.2 percent.

The widening of the trade deficit is likely to put significant depreciatory pressure on the rupee, resulting in a subsequent pressure on the State Bank of Pakistan’s (SBP) foreign reserves. This is because the SBP follows a managed float regime, intervening in the foreign exchange market to prevent the rupee from straying beyond its permitted exchange rate band.

As per data from the PBS, Pakistan’s import bill grew to a whopping $5.53 billion, indicating that the import bill had recorded a 14.52 percent growth on a MoM basis. Export figures in April 2025, on the other hand, witnessed a 19.05 percent MoM drop, falling to just $2.14 billion.

Moreover, this trend of rising imports and falling exports is present in year-on-year (YoY) trade statistics as well. Imports have logged a 14.09 percent YoY increase, with exports witnessing 8.93 percent fall on a YoY basis. 

Aggregated data from the PBS indicates that the trade deficit for the first ten months of FY 2024-25 has ballooned to a colossal $21.35 billion. The breakdown of Pakistan’s trade statistics over the aforementioned period has revealed that total exports stand at $26.86 billion, vastly outweighed by imports amounting to $48.21 billion.

Details from reports suggest that the higher import bill signifies a revival of the economy, as the domestic economy demands more petroleum products. The surge in petroleum demand comes on the back of higher vehicle sales due to lower interest rates.