Pakistan’s trade deficit remains one of the most persistent fault lines in its economy. While recent months have brought relative calm to the foreign exchange market and even a rare current account surplus, the underlying imbalance between what the country buys from the world and what it sells abroad continues to widen.
The numbers tell a familiar story: Pakistan imports far more than it exports, and the gap is proving difficult to close.
On average, Pakistan’s annual trade deficit fluctuates between $25–35 billion, reflecting a structural problem rather than a temporary shock. Imports are dominated by high-value items such as petroleum products, machinery, chemicals, pharmaceuticals, and edible oil.
Exports, by contrast, remain narrowly concentrated in low-value sectors—most notably textiles, which account for more than 55% of total exports, alongside rice, leather, and sports goods. This imbalance, buying expensive goods and selling cheap ones, has defined Pakistan’s external sector for decades.
In FY25, Pakistan’s merchandise trade deficit widened to $28.3 billion, up from $24.1 billion in FY24. Imports rose sharply as domestic economic activity recovered moderately, boosting demand for raw materials, machinery, and industrial inputs.
Crucially, the rise in imports was driven more by higher volumes than by prices, as global commodity prices remained stable or declined. Exports, meanwhile, grew by a modest 4.5%, far slower than the double-digit growth seen a year earlier.
Food exports were a major drag. Rice exports declined as India re-entered global markets and Pakistan faced lower domestic production.
Sesame seed exports also fell after Ethiopia and Sudan restored supply chains to China, costing Pakistan market share.
While growth in textiles, petroleum products, and other manufactured goods partially offset these declines, it was not enough to prevent the trade gap from widening.
