Pakistan’s trade deficit widens 46% year on year in September

A view of shipping containers at a warehouse yard near the port area in Karachi, Pakistan, on July 31, 2025. (REUTERS/File)
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Updated 03 October 2025
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Pakistan’s trade deficit widens 46% year on year in September

  • Trade deficit increased by $1.05 billion from $2.29 billion in the same month last year
  • Pakistan’s top imports included petroleum products, machinery, gas, steel and cotton

ISLAMABAD: Pakistan’s trade deficit widened 46% in September to $3.34 billion as imports outpaced exports, the country’s statistics bureau said on Thursday, adding pressure on the country’s foreign exchange reserves.

The development comes as the cash-strapped country struggles to stabilize its foreign exchange reserves, amid looming debt repayments and limited avenues of fresh inflows. The total liquid reserves held by the country stood at $19.80 billion as of September 26, according to the State Bank of Pakistan.

The latest data from the Pakistan Bureau of Statistics (PBS) revealed that the trade deficit had increased by $1.05 billion, compared to $2.29 billion in the same month last year.

“Last month, the country’s imports surged 14% to $5.85 billion vs $5.13 billion last year,” the PBS said in its report. “Exports declined 12% to $2.5 billion vs $2.84 billion year earlier.”

The trade gap widened 33% to $9.37 billion in the third quarter of 2025, compared to $7.05 billion in the same period last year, according to the report. Pakistan’s exports fell 4% from $7.91 billion to $7.6 billion on a quarterly basis, while imports surged 13.5% from $14.9 billion to $16.9 billion.

The trade gap underscores structural weaknesses in Pakistan’s export base, dominated by low value-added textiles, while the country remains heavily reliant on costly fuel and machinery imports. The South Asian nation remains heavily reliant on foreign petroleum products, importing $17.9 billion in FY2024-25, almost equal to its textile export earnings.

Pakistan’s top exports this year included knitwear, readymade garments, bedwear, cotton, cloth, rice, towels, made-up articles, fruits, cotton yarn and basmati rice, according to the PBS. Items imported during the same period were petroleum products, crude oil, palm oil, electric machinery and apparatus, plastics, iron and steel, liquified natural gas, mobile phones and raw cotton.


Pakistan’s military chief Asim Munir in spotlight over Trump’s Gaza plan

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Pakistan’s military chief Asim Munir in spotlight over Trump’s Gaza plan

  • Sources say Munir is expected to visit Washington in the coming weeks for talks with the US president on Gaza
  • Any Pakistani troop role in Gaza could trigger backlash from pro-Palestine, anti-US groups at home, analysts say

ISLAMABAD: Pakistan’s most powerful military chief in decades faces the toughest test of his newly amassed powers as Washington pushes Islamabad to contribute troops to the Gaza stabilization force, a move analysts say could spark domestic backlash.

Field Marshal Asim Munir is expected to fly to Washington to meet President Donald Trump in the coming weeks for a third meeting in six months that will likely focus on the Gaza force, two sources told Reuters, one of them a key player in the general’s economic diplomacy.

Trump’s 20-point Gaza plan calls for a force from Muslim nations to oversee a transition period for reconstruction and economic recovery in the war-torn Palestinian territory, decimated by over two years of Israeli military bombardment.

Many countries are wary of the mission to demilitarize Hamas in Gaza, which could drag them into the conflict and enrage their pro-Palestinian and anti-Israeli populations.

But Munir has built a close relationship with the mercurial Trump to repair years of mistrust between Washington and Islamabad. In June, he was rewarded with a White House lunch — the first time a US president hosted Pakistan’s army chief alone, without civilian officials.

“Not contributing (to the Gaza stabilization force) could annoy Trump, which is no small matter for a Pakistani state that appears quite keen to remain in his good graces — in great part to secure US investment and security aid,” said Michael Kugelman, Senior Fellow, South Asia at Washington-based Atlantic Council.

‘PRESSURE TO DELIVER’

Pakistan, the world’s only Muslim country with nuclear weapons, has a battle-hardened military having gone to war with arch-rival India three times and a brief conflict this summer. It has also tackled insurgencies in its far-flung regions and is currently embroiled in a bruising war with militants who it says are operating from Afghanistan.

Pakistan’s military strength means “there is a greater pressure on Munir to deliver his capacity,” said author and defense analyst Ayesha Siddiqa.

Pakistan’s military, foreign office and information ministry did not respond to questions from Reuters. The White House also did not respond to a request for a comment.

Pakistani Foreign Minister Ishaq Dar said last month that Islamabad could consider contributing troops for peacekeeping but disarming Hamas “is not our job.”

UNPRECEDENTED POWER

Munir was earlier this month anointed chief of the defense forces to head the air force and navy as well, with a job extension until 2030.

He will retain his field marshal title forever, as well as enjoy lifetime immunity from any criminal prosecution under the constitutional amendments that Pakistan’s civilian government pushed through parliament late last month.

“Few people in Pakistan enjoy the luxury of being able to take risks more than Munir. He has unbridled power, now constitutionally protected,” Kugelman added.

“Ultimately, it will be Munir’s rules, and his rules only.”

THE HOME FRONT RISK

Over the past few weeks, Munir has met military and civilian leaders from countries such as Indonesia, Malaysia, Saudi Arabia, Turkiye, Jordan, Egypt and Qatar, according to the military’s statements, which Siddiqa said appeared to be consultations on the Gaza force.

But the big concern at home is that the involvement of Pakistan troops in Gaza under a US-backed plan could re-ignite protests from Pakistan’s religio-political parties that are deeply opposed to the US and Israel.

These parties have street power to mobilize thousands. A powerful and violent anti-Israel party that fights for upholding Pakistan’s ultra-strict blasphemy laws was banned in October.

Authorities arrested its leaders and over 1,500 supporters and seized its assets and bank accounts in an ongoing crackdown, officials said.

While Islamabad has outlawed the group, its ideology is still alive.

The party of former jailed premier, Imran Khan, whose supporters won the most seats in the 2024 national elections and has wide public support, also has an axe to grind against Munir.

Abdul Basit, Senior Associate Fellow, S. Rajaratnam School of International Studies in Singapore, said if things escalated once the Gaza force was on the ground, it would cause problems quickly.

“People will say ‘Asim Munir is doing Israel’s bidding’ — it will be foolhardy of anyone not to see it coming.”