Trade Deficit Widens 44% in July; Govt Expects Recovery Through Exports

ISLAMABAD – Pakistan’s trade deficit surged 44% year-on-year in July 2025, reaching $2.7 billion, driven by a sharp increase in imports. Planning Minister Ahsan Iqbal termed the rise a “temporary dip,” anticipating that higher imports of raw materials will boost exports in the coming months.

July exports grew 16.9% to $2.7 billion, while remittances rose 7.4% to $3.2 billion, reflecting stronger external sector stability. The increase in imports was partly attributed to importers delaying consignments to benefit from reduced tariffs, introduced under IMF and World Bank conditions.

Iqbal highlighted that duties were lowered only on items supporting export growth. He urged exporters to capitalise on the lowest US tariffs in the region under the recent Pak-US trade arrangement. The government expects the deal to attract foreign investment aimed at exporting to US and EU markets.

The Planning Commission’s monthly report noted improved macroeconomic indicators, including a FY2025 current account surplus of $2.1 billion, reduced fiscal deficit of 5.4% of GDP, and record PSDP spending of Rs1.068 trillion. Despite global headwinds, officials say Pakistan has entered FY2026 with renewed investor confidence and stronger economic fundamentals.