- December exports amounted to $2.84 billion, an increase of 0.67% year-on-year.
- Imports climbed to $5.285 billion, registering an increase of 14% year-on-year.
- Monthly comparisons showed a 47% increase in the trade deficit.
ISLAMABAD: Pakistan’s trade deficit reached $2.44 billion in December 2024, marking a 35% year-on-year increase and the highest level since April, News reported, citing the Pakistan Bureau of Statistics (PBS), which released the data on Wednesday.
This increase is mainly attributed to a sharp rise in imports, which reached their highest level in 27 months.
Exports for December stood at $2.84 billion, reflecting a modest 0.67% year-on-year increase, while imports climbed to $5.285 billion, registering a 14% year-on-year increase.
Monthly comparisons showed a 47% rise in the trade deficit from November’s $1.667 billion, with imports increasing by 17.4% while exports remained almost stagnant with a marginal rise of 0.28%.
Exports showed little momentum, falling from $2.833 billion in November 2024 to $2.841 billion in December. Analysts cite weak global demand for Pakistan’s major exports, such as textiles, as a key factor limiting growth.
In contrast, imports soared, fueled by growing demand for essential commodities and raw materials, with December’s figure of $5.28 billion being the highest since September 2022.
For the first half of the 2024-25 financial year (July-December), the trade deficit stood at $11.17 billion, a slight increase of 0.18% year-on-year compared to the same period. from last year. Exports during this period increased by 11% to $16.56 billion, while imports increased by 6.1% to $27.7 billion.
While first-half trade figures suggest stability, December’s high import bill threatens to destroy the precarious balance. “The increasing trajectory of imports is concerning, especially when coupled with sluggish export growth,” warned a senior economist.
The growing trade gap poses challenges for Pakistani policymakers, who are grappling with multiple economic pressures.
Experts suggest targeted measures to boost exports, such as diversifying export products and exploring new markets. “Without a strategic focus on improving export competitiveness, the trade imbalance will continue to put pressure on the economy,” said an industry analyst.
Policymakers must find ways to strike a balance between maintaining essential imports and reducing the trade deficit, which remains one of the main drivers of external account vulnerabilities.
The PBS also reported services trade for July-November of the current fiscal year. The services sector, which includes information technology, financial services and professional consulting, has significant growth potential, particularly in global markets.
Pakistan’s services trade deficit showed signs of improvement in the first five months of the 2024-25 financial year (July-November), narrowing to $1.15 billion, a reduction of 8. 5% year-on-year (yoy) compared to the deficit of $1.257 billion recorded in 2017. the same period last year.
This improvement was driven by services exports of $3.27 billion, up 7.6 percent from $3.04 billion in the corresponding period last fiscal year. Services imports, meanwhile, amounted to $4.425 billion, an increase of 2.9 percent from the $4.3 billion recorded last year.
In November 2024, the services trade deficit narrowed significantly to $152.9 million, a 42.4% reduction from October’s $265.4 million. This decline was fueled by a 13.1% monthly drop in services imports, which stood at $828.6 million in November, compared to $953 million in October.
On the export side, services exports in November decreased slightly by 1.76% to $675.7 million, compared to $687.8 million in October. However, on an annual basis, November exports increased by 6.5% compared to $634.4 million in November 2023, reflecting a positive trend in the performance of Pakistan’s services sector.
The annual comparison for November 2024 shows a 4.6% increase in services imports, which reached $828.6 million compared to $792 million in November 2023.
Despite this rise, the concomitant growth in exports highlights the improving efficiency of the services sector, which is key to diversifying Pakistan’s economic portfolio beyond traditional goods exports.
“The steady improvement in services exports is encouraging, but strategic investments are needed to further develop this sector,” said a senior trade analyst.