By Staff Reporter
ISLAMABAD: The trade deficit ballooned 57 percent month-on-month to $3.4 billion in April as exports contracted sharply and imports surged, signaling mounting pressure on the country’s external accounts ahead of critical IMF budget talks.
The Pakistan Bureau of Statistics (PBS) reported that exports fell 17.48 percent month-on-month to $2.18 billion in April 2025, marking a 6.52 percent year-on-year decline. Imports, however, climbed 16.48 percent from March to $5.61 billion, up nearly 17 percent from April 2024.
The decline in exports was led by textiles, which account for over half of Pakistan’s overseas sales. Textile shipments fell 1.35 percent year-on-year to $1.22 billion in April, with a steeper 14.64 percent drop from March. While knitwear and readymade garments eked out modest annual gains of 2 percent and 3.9 percent, respectively, bedwear and cotton cloth slumped 3.4 percent and 6.4 percent. Cotton yarn exports plunged 30.5 percent, reflecting weaker global demand and pricing pressures.
The textile sector’s volatility is alarming. PBS data shows exports swung from double-digit growth last fiscal to a 1.35 percent contraction in April. Cumulative textile exports for the first 10 months of FY2024/25 rose 8.4 percent to $14.83 billion, but momentum has faded sharply since February.
The import bill surged despite the government’s focused measures to curb foreign buying tied to Pakistan’s $7 billion IMF program, driven by energy and industrial inputs.
Crude oil topped the list at Rs151.47 billion, followed by electrical machinery (Rs150.2 billion) and petroleum products (Rs139.11 billion). Palm oil, iron, steel, and liquefied natural gas (LNG) also saw significant inflows, signaling rising input costs for manufacturers.
On a cumulative basis, imports during July-April rose 5.75 percent to $48.29 billion, with the energy and manufacturing sectors absorbing the bulk of foreign spending.
Factory Output Shows Patchy Recovery
Large-scale manufacturing posted a tepid 1.47 percent growth for July-March 2024/25, driven by tobacco, garments, automobiles, and construction materials.
However, declines in food processing (20.09 percent), chemicals (6.83 percent), and machinery production (71.74 percent) highlighted persistent bottlenecks. March’s output rose 1.79 percent year-on-year but slipped 4.64 percent from February, reflecting uneven demand.
FDI Inflows Remain Fragile
Foreign direct investment fell 3 percent year-on-year to $1.79 billion in the first 10 months of FY2024/25, though April saw a 447 percent monthly jump to $141 million after a March trough of $26 million.
China remained the top investor, pumping $711 million into power and infrastructure projects—a 39 percent annual increase. The financial services sector attracted $601 million, while manufacturing and construction saw modest gains.
Weekly Inflation Climbs
TheSensitive Price Index (SPI) inflation rose 1.03 percent for the week ending May 15, 2025, fueled by sharp increases in food and clothing costs. The weekly SPI ticked up 0.24 percent from the prior week, adding pressure on households grappling with rising living expenses.
Chicken prices soared 15.95 percent, leading the week’s gains, followed by eggs at 8.34 percent, sugar at 1.97 percent, and long cloth at 1.74 percent, per PBS data. Other notable increases included powdered milk (1.59 percent), gur (1.48 percent), pulse gram (0.94 percent), lawn printed fabric (0.77 percent), mutton (0.62 percent), cooked beef (0.49 percent), and energy-saving bulbs (0.31 percent). Supply chain disruptions and elevated input costs, particularly for poultry, were key culprits.
Year-on-year, SPI inflation rose 1.29 percent, with ladies’ sandals jumping 55.62 percent, chicken 47.22 percent, moong pulses 29.02 percent, powdered milk 24.02 percent, and sugar 21.87 percent. Bananas, pulse gram, beef, vegetable ghee, LPG, lawn fabric, and firewood also saw double-digit increases.
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