Sharp increase in trade deficit a national challenge for Pakistan: S M Tanveer

LAHORE: S M Tanveer, FPCCI Leader, has expressed deep concern over the latest trade figures for September 2025, which reveal a sharp 45.8 percent year-on-year increase in the trade deficit, climbing to USD3.34 billion.

This alarming trend is a clear indication of underlying structural issues in the economy, including uncompetitive exports, unsustainable import dependence, and the absence of a coherent industrial revival strategy, he said. According to him, the decline in exports by 11.7 percent YoY, coupled with a surge in imports by 14.0 percent, has resulted in a widening structural imbalance. In the first quarter of FY26 alone, Pakistan’s trade deficit has ballooned to USD 9.37 billion, a 32.9 percent increase from the same period last year.

Tanveer apprehended that this situation might lead to declining export competitiveness due to high interest rates and exorbitant energy costs, rising import dependency with no parallel growth in domestic production, and weak global outreach beyond traditional sectors like textiles.

To address these challenges, he has proposed an immediate reduction in policy rate to enable export financing, energy tariff rationalization for exporters to remain regionally competitive, import prioritization focusing on industrial inputs over non-essentials, diversification of export base exploring new sectors like engineering goods, IT, and agro-processing, and FDI facilitation and investment in import-substitution industries.

Tanveer has urged the government to call a high-level Export Emergency Roundtable to avert an external account crisis and work towards a more sustainable and competitive trade policy framework, emphasizing that the trade deficit is no longer just an economic number but a national challenge.

Copyright Business Recorder, 2025