PAKISTAN’S monthly trade deficit ballooned to $4.07bn last month, its highest level since June 2022, further straining the fragile economy. The dramatic spike was triggered by an equally sharp surge in imports that overwhelmed a tepid export recovery. The 43.5pc month-on-month jump in the trade gap from $2.84bn in March was anticipated due to energy supply disruptions due to the Middle East conflict, sending oil and gas prices skyrocketing. It was no secret that the global fuel price shock, which has caused an upheaval across Asia’s economies, would affect Pakistan disproportionately because of the country’s heavy reliance on imported energy and its weak balance-of-payments position.

The prime minister recently highlighted the scale of the damage, stating that the oil import bill had nearly tripled. This single data point explains much of the $1.45bn month-on-month expansion in the total import bill, which climbed from $5.10bn in March to $6.55bn in April, a 28.41pc surge that no demand-management toolkit could have contained. The export side offered little to offset the increase in the import bill. When imports are accelerating at three times the pace of exports, a single-digit rebound in outbound shipments is not a counterweight. Nor are the conventional pressure valves working. Unofficial restrictions on the opening of letters of credit, a tool we have often deployed to suppress non-essential import demand, are providing no real relief. The reason is simple: this is not a consumer-driven import surge that administrative actions can slow. It is a cost-driven one. Going forward, there is little basis for optimism. Energy shortages are expected to persist, and with the Middle East conflict showing no signs of resolution, fuel prices are likely to remain elevated. Pakistan’s textile-heavy, capacity-constrained export base will be unable to respond to the crisis. Unless Islamabad can secure external financing through prompt multilateral and bilateral arrangements or loans, the balance-of-payments will remain under strain.

Published in Dawn, May 11th, 2026