DATA released by Pakistan Bureau of Statistics (PBS) on Thursday indicated that the country’s trade deficit ballooned nearly 46% in September 2025 to $3.34 as imports surged and exports shrank, increasing pressure on the external sector.
The deficit, up from $2.29 billion in September last year, was fueled by a 14 percent jump in imports to $5.85 billion, while exports slid 11.7 percent to $2.5 billion. For the July–September quarter of the ongoing fiscal year, the trade gap swelled 32.9 percent year-on-year to $9.37 billion. Imports during the period climbed 13.5 percent to $16.97 billion, while exports fell 3.8 percent to $7.6 billion.
This should be a source of concern for our policy-makers as exports are not picking up but the imports are surging at an alarming rate due to a policy change under the influence of the International Monetary Fund (IMF). The phenomenon becomes understandable in the backdrop of continuous hike in the cost of production that is not only discouraging investors but also forcing closure or sale of plants and entities as highlighted by the exit of a motorcycle manufacturer and threats of car manufacturers to go for import business in protest against the decision to allow free-for-all import of used cars at the cost of local industry. There seems to be no worthwhile scope for a meaningful increase in exports in immediate to short terms but imports will definitely go up sharply as the government implements the so-called tariff reforms that can turn the country into a dumping ground of foreign goods.
The large-scale damage to agriculture due to recent floods means further contraction of agri-based exports and an increase in food imports in coming months. There are legitimate concerns that the widening deficit could strain foreign reserves, fuel rupee volatility, and complicate debt repayments at a time when Pakistan is already dependent on external financing. The situation is unlikely to improve without aggressive steps to boost industrial competitiveness and diversify exports. It is time we speed up establishment of all export processing zones as envisaged under China-Pakistan Economic Corridor (CPEC), come up with attractive incentives for investment in different sectors of economy, improve related infrastructure, ensure provision of reliable and cost-effective energy, focus on research and development and market-oriented training of the workforce.
