Pakistan Trade Deficit December 2025 widened sharply, signaling renewed pressure on the country’s external sector as imports surged while exports continued to struggle. According to provisional data released by the Pakistan Bureau of Statistics (PBS), the trade deficit expanded by 28.38% month-on-month (MoM) to $3.705 billion, compared to $2.886 billion in November 2025.
The latest figures underline persistent structural challenges in Pakistan’s trade landscape, particularly declining export competitiveness and rising import dependence, which continue to strain the balance of payments.
Read More: https://theboardroompk.com/port-qasim-to-construct-two-modern-mooring-boats/
Pakistan Trade Deficit December 2025: Monthly Trade Performance
A closer look at the monthly data reveals a clear imbalance between imports and exports in December 2025.
Exports during the month stood at $2.317 billion, reflecting a 4.26% decline MoM. This contraction highlights ongoing challenges for Pakistan’s export sector, including weak global demand, energy constraints, and cost pressures affecting key industries such as textiles and manufacturing.
In contrast, imports surged to $6.022 billion, marking a 13.49% increase MoM. The sharp rise in imports driven by higher demand for energy products, raw materials, and machinery significantly outweighed the fall in exports, resulting in the wider monthly trade gap.
In practical terms, for every dollar Pakistan earned from exports in December, it spent more than two and a half dollars on imports, amplifying external vulnerabilities.
Year-on-Year Analysis of Pakistan Trade Deficit December 2025
On a year-on-year (YoY) basis, the Pakistan Trade Deficit December 2025 expanded by 23.79%, rising from $2.993 billion in December 2024 to $3.705 billion.
Exports posted a steep 20.41% YoY decline, falling from $2.911 billion last year to $2.317 billion. This sharp contraction reflects weaker export orders, currency volatility, and challenges in maintaining market share in key international destinations.
Meanwhile, imports edged higher by 2.0% YoY, increasing from $5.904 billion to $6.022 billion. Although the annual rise in imports appears modest, it was sufficient when combined with falling exports to significantly widen the trade deficit.
Pakistan Trade Deficit December 2025: FY26 Cumulative Trend
The cumulative picture for the first half of the fiscal year further reinforces concerns.
From July to December FY26, Pakistan’s exports totaled $15.184 billion, representing an 8.7% decline YoY. During the same period, imports climbed 11.28% YoY to $34.388 billion.
As a result, the cumulative trade deficit ballooned to $19.204 billion, a 34.57% increase compared to the corresponding period last year. This widening gap highlights a growing mismatch between export earnings and import payments, increasing reliance on external financing and foreign inflows.
Key Drivers Behind the Pakistan Trade Deficit December 2025
Several structural and cyclical factors contributed to the deteriorating trade balance:
- Persistent decline in export volumes amid weak global demand
- Rising import demand for fuel, raw materials, and capital goods
- Limited diversification of Pakistan’s export base
- High production and energy costs impacting competitiveness
Despite some month-to-month fluctuations, the overall trend indicates sustained pressure on Pakistan’s external accounts.
Economic Implications and Outlook
The widening Pakistan Trade Deficit December 2025 poses significant challenges for economic stability. A larger trade gap places downward pressure on foreign exchange reserves and complicates monetary and fiscal management. It also raises concerns over the country’s ability to meet external financing needs without increasing debt.
Going forward, sustainable improvement will require boosting export competitiveness, expanding value-added production, and managing import growth through targeted policy interventions.