Pakistan's trade deficit for July-August 2025 exceeded $6 billion, a 29% year-on-year increase, as imports grew over 14% while exports saw minimal growth.
Pakistan's Trade Deficit Widens by 29% in First Two Months
Islamabad - Pakistan's trade deficit surged by a significant 29.01% during the first two months of the current fiscal year (July-August 2025), crossing the alarming threshold of $6 billion. This widening gap between imports and exports was driven by a substantial rise in the country's import bill, which far outpaced the nearly stagnant growth in exports. The latest data, officially released by the Federal Bureau of Statistics, highlights the persistent and complex economic challenges facing the country as it navigates the new fiscal year.
More from Geo News, The detailed report from the statistical body indicates that the total trade deficit for the combined months of July and August 2025 stood at over $6.01 billion. This notable increase was primarily fueled by a substantial 14.23% jump in the country's import bill. The total value of goods imported into Pakistan during these two months reached a massive $11.11 billion. In stark contrast, the nation's exports saw a marginal and almost negligible increase of only 0.65%, with total export earnings amounting to $5.10 billion for the same period. This disparity between the soaring cost of imports and the sluggish performance of exports is the central issue reflected in the latest figures.
When analyzing the data for the month of August 2025 in isolation, the trade deficit saw a year-on-year (YoY) increase of 30.13%, reaching a figure of $2.86 billion. However, on a month-on-month (MoM) basis, there was a small glimmer of relief as the deficit narrowed by 8.81% when compared to the figures from July 2025. While this monthly improvement is a positive sign, it is a minor development in the broader economic picture, which is dominated by the worrying year-on-year trend.
The data on imports for August 2025 stood at a significant $5.28 billion. This reflects the country's continued and heavy reliance on imported goods. These imports are not solely consumer products but also include essential raw materials and intermediate goods that are necessary for the functioning of Pakistan's industrial and manufacturing sectors. The nearly 14% cumulative rise in the value of imports over the first two months of the fiscal year is a key factor that puts considerable strain on the nation's limited foreign exchange reserves and directly contributes to the widening of the trade gap.
Export performance, which is widely regarded as a critical engine for sustainable economic growth and stability, has been notably lackluster. In August 2025, the country's national exports amounted to just $2.41 billion. This figure represented a sharp year-on-year decline of 12.49% compared to the same month in the previous year. Furthermore, on a month-on-month basis, exports also fell by 9.98% compared to the earnings in July 2025. While the cumulative export growth for the first two months of the new fiscal year remains slightly positive at 0.65%, the clear declining trend observed in August is a significant cause for concern among economists, policymakers, and the business community alike.
This widening trade deficit at the very start of the fiscal year presents a formidable challenge for Pakistan's economic managers. The government's ability to formulate and effectively implement policies that can successfully boost exports while simultaneously managing the burgeoning import bill will be crucial in the coming months. The primary goals of such policies would be to ensure long-term economic stability, protect the country's external account from further strain, and build up foreign exchange reserves. The latest figures from the Federal Bureau of Statistics serve as a stark reminder of the urgent need for robust policy measures. These measures should aim to enhance the competitiveness of Pakistani goods in the international market, diversify the export base, and promote value-added, export-oriented industries to create a more balanced and resilient economy.