Trade Deficit Narrowed in March 2025
Staff Report
A detailed breakdown of trade numbers released by the Pakistan Bureau of Statistics (PBS) shows that every month, imports remained flat at US$4.8bn during Mar’25.
This stability was primarily driven by lower imports in the petroleum and food sectors on a weighted average basis, while agriculture imports increased.
On a cumulative basis, import bill was recorded at US$42.7bn (up 9%YoY) during 9MFY25 mainly due to higher imports of machinery, textile, and agriculture, while petroleum and food imports declined.
Exports increased to US$2.6bn (up 6%MoM) during Mar’24. Likewise, during 9MFY25, exports clocked in at US$24.7bn (up 8%YoY), mainly due to growth in exports in the food and textile sectors.
Thus, the cumulative trade deficit clocked US$17.9bn (up 5%YoY) for 9MFY25. Every month, however, the trade deficit narrowed to US$2.1bn (down 6%MoM) in Mar’25, thanks to robust remittances.Pakistan, Netherlands Discuss Trade and Investment Expansion
Moreover, the country posted a current account surplus of US$1.2bn, while the 9MFY25 surplus stands at US$1.9bn. Imports remained flat at US$4.8bn in Mar’25 Pakistan imports remained flat at US$4.8bn in Mar’25 mainly due to petroleum (down 1%MoM), food (down 8%MoM), and textile imports (down 2%MoM). However, machinery and agriculture imports increased by 6%MoM and 8%MoM, respectively.
During 9MFY25, imports increased by 7%YoY led by the machinery group (up 14%YoY) and agriculture (up 3%YoY). Notably, mobile phone imports were down 13%YoY amid high prices and increased local manufacturing, while raw cotton imports grew (up 4xYoY) owing to a shortfall in domestic cotton production during the period.
Exports were up 6%MoM in Mar’25 every month, exports were reported at US$2.6bn (up 6%MoM) during the period primarily due to food (up 3%MoM) and textile (up 1%MoM). Within textiles, knitwear exports increased by 6%MoM and bedwear by 2%MoM.
In the food sector, rice exports fell by 5 %MoM, however, fishery items showed growth of 90%MoM. On a cumulative basis, exports clocked in at US$24.7bn (up 8%YoY), during the 9MFY25. This growth was driven by the textile sector (up 9%YoY) and the food sector (up 2%YoY). FY25 Trade Deficit expected at US$26.7bn (21%YoY) aimed at Rising Imports.
We expect Pakistan’s trade deficit to reach US$26.7bn (up 21%YoYmainly due to higher imports of machinery, agriculture equipment, and automobiles, supported by improving economic activity driven by lower interest rates and inflation,” Sherman Research said in a report.
However, heavy-weight categories such as oil and food imports are expected to remain flat, despite a reduction in global oil prices following the imposition of U.S. tariffs. As a result, imports are projected to reach US$60bn (up 13%YoY) in FY25.
