Pakistan’s trade deficit declines in FY24: Jam Kamal Khan
ISLAMABAD: Federal Minister for Commerce, Jam Kamal Khan, informed the National Assembly on Monday that Pakistan’s trade deficit has decreased from USD 27.47 billion in FY23 to USD 24.11 billion in FY24, a result of reduced imports and increased exports.
Responding to queries during the National Assembly’s question hour, he mentioned that Pakistan’s trade deficit slightly expanded to USD 10.4 billion in the first two quarters of FY2024-25 (July-December), compared to USD 10.3 billion during the same period last year.Jam Kamal Sets Sights on Expanding Rice Exports
He attributed the rise in imports to the ongoing economic recovery, as both the Asian Development Bank (ADB) and the International Monetary Fund (IMF) revised Pakistan’s growth projections upward for FY25 to 3.0% and 3.2%, respectively. The increase in imports reflects revived industrial activity, with several key sectors experiencing growth.
In December FY25, compared to the same month in FY24, imports of industrial machinery and equipment rose by 20%, while textile industrial machinery imports surged by 40%, indicating expanded production capacity. Imports of auto parts for heavy vehicles and trailers grew by 58%, reflecting growth in the transport and logistics sectors. Additionally, imports of heavy equipment and parts more than doubled, registering a 109% increase.
This broad-based rise in industrial imports underscores the growing demand for infrastructure and production-related equipment, driven by economic expansion and improved business sentiment. The surge in imports has also supported rising domestic demand, encouraged by decreasing inflation and lower interest rates.
The minister emphasized that Pakistan is relying on an export growth strategy to address its trade deficit. He noted that various initiatives led by the Ministry of Commerce have helped reduce the deficit and achieve export targets. He highlighted several initiatives, such as the nearing completion of negotiations for the Pakistan-Gulf Cooperation Council Free Trade Agreement (Pak-GCC FTA), the successful completion of the biennial review of the European Union’s GSP Plus status, and the operationalization of Preferential Trade Agreements (PTAs) with Turkey, Uzbekistan, and Azerbaijan.
Transit Trade Agreements with Uzbekistan and Tajikistan are also in effect, while 14 protocols in the food and agriculture sector have been signed with China. Reviews of trade agreements with Malaysia and Indonesia are ongoing. The SME Internationalization and Export Readiness Programme is being pursued in collaboration with the Milan Chamber of Commerce & Industry. South Korea’s Trade Minister, Inkyu Cheong, has also outlined a plan to shift Korea’s industrial base from its Northeast Asian neighbors to Pakistan, following the signing of the Economic Partnership Agreement (EPA) between the two nations.
In May 2024, Pakistan and Cambodia agreed to form a joint trade committee to boost trade and investment, with leading business associations from both countries participating. Moreover, in November 2024, Pakistan and Belarus strengthened their bilateral relations by signing 15 significant agreements and memorandums of understanding (MoUs).
