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Pakistan Economy in Shambles, Trade Deficit Soars by 43.22% with Neighbours in First Half of FY2024-25

Pakistan economy faces significant strain as its trade deficit with neighboring countries grows by 43.22% in the first half of FY2024-25, primarily due to rising imports and slow export growth.

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Pakistan Economy

Photograph: (IANS)

Pakistan Economy: Pakistan's trade deficit with nine neighboring countries has grown by an alarming 43.22% during the first half of the current fiscal year, from July 2024 to December 2024. Data from the State Bank of Pakistan (SBP) reveals this widening gap, driven primarily by soaring imports from China, India, and Bangladesh, while exports saw modest growth.

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Pakistan Economy Faces Increasing Trade Imbalance as Imports Surge by 30%

The data from the State Bank of Pakistan (SBP) reveals a dramatic 29.97% rise in imports from neighboring countries, bringing the total import value to $7.73 billion in the first half of the fiscal year. In contrast, exports showed a modest 7.85% increase, rising from $2.23 billion to $2.40 billion. Although exports to Afghanistan, Bangladesh, and Sri Lanka saw some growth, the overall impact on the Pakistan economy has been limited, as imports continue to outpace exports.

Pakistan Economy Struggling with Structural Challenges Amid Global and Regional Pressures

Despite being the 24th-largest economy by GDP (PPP), the Pakistan economy remains under pressure due to various internal and external challenges. With a population of 241.5 million, the country ranks 161st in per capita GDP, signaling deep economic vulnerabilities. Political instability, rapid population growth, and heavy foreign debt are making it difficult for Pakistan to stabilize its economy and improve its trade relations with neighboring countries.

Neighboring Countries Play a Pivotal Role in Pakistan Economy's Trade Dynamics

Pakistan's trade deficit with neighboring countries, such as China, India and Bangladesh, continues to widen, putting additional strain on the Pakistan economy. While exports to countries like Afghanistan and Sri Lanka are gradually improving, strained political relations with some neighbors hinder the full potential of regional trade. The Pakistan economy is dependent on finding ways to address these diplomatic and economic issues to ensure a balanced trade relationship.

Pakistan Economy
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