Imports cross $5 billion after two years

Pakistan's trade deficit widened 35% to $1.8 billion in December 2024 after the government let imports grow to more than $5 billion for the first time in two years. Pakistan Bureau of Statistics (PBS) reported on Wednesday that trade deficit – the gap between imports and exports – widened 35% in December compared to the same month of last year. The key reason behind the jump in deficit was $5.3 billion worth of imports – the highest since December 2022. It was for the first time in two years the authorities allowed imports to cross $5 billion. There was a $650 million, or 14%, increase in imports last month. Import restrictions, mostly informal, have been in place for the past almost three years due to external sector challenges. The government has managed to bring the current account deficit under control on the back of compressed imports and some increase in the formal non-debt creating inflows. Imports have been controlled around $4.5 billion a month due to less availability of foreign exchange and the central bank's policy to buy dollars from the market to build its reserves.