In a stark indicator of Pakistan’s economic freefall, December 2025 exports crashed by 20.4%, extending a painful five-month losing streak. Government statistics paint a grim picture of a trade sector buckling under geopolitical strains and inherent weaknesses.
Tensions at borders with India and Afghanistan have sealed off critical trade corridors, slashing volumes and inflating costs. Pakistan’s heavy dependence on China for commerce has backfired, burdened by exorbitant shipping and tariff hurdles.
Export earnings tumbled from nearly $2.91 billion the previous December to $2.32 billion, even as imports inched up 2% to $6.02 billion. The result? A 24% spike in the trade deficit to $3.7 billion for the month alone.
This persistent erosion underscores chronic problems like undiversified products, eroded global competitiveness, and exclusion from international supply networks. Over July-December 2025-26, exports shrank 8.7% to $15.18 billion against a 11.3% import rise to $34.39 billion, widening the half-year deficit to $19.2 billion—35% worse than prior year.
Historical trends show Pakistan’s exports trapped in a narrow band, failing to scale with demand or compete regionally. Past administrations propped up the economy via official inflows, worker remittances, and ad-hoc loans, sidestepping export revival.
December’s data signals these band-aids are peeling off, converting hidden frailties into acute pressures. As deficits mount, Pakistan risks currency devaluation and reserve depletion, urging a pivot to export-led growth strategies before it’s too late.