Pakistan’s trade deficit widened sharply in December, rising to a 42-month high as exports fell and imports increased, official data showed on Friday.

The trade gap expanded to $3.7 billion in December, up 24% from a year earlier and 28% from November, according to the Pakistan Bureau of Statistics.

This is the highest number since June 2022.

Exports declined 20% year-on-year and 4% month-on-month to $2.31 billion, while imports totaled $6.02 billion, up 2% from a year earlier but down 13% from November. Exports in December were the lowest since $2.2 billion in April.

In December alone, exports fell 4.36% from the previous month, while imports rose 13.49% on a monthly basis, the statistics bureau said.

Compared with December last year, exports dropped 20.41% and imports increased by about 2%.

In the first half of fiscal year 2026 (July-December 2025), the trade deficit reached $19.20 billion, an increase of nearly 35% from the same period a year earlier.

During the six-month period, imports amounted to $34.39 billion, while exports stood at $15.18 billion.

The widening deficit reflects persistent pressure on exports alongside resilient import demand, analysts said.

“The December numbers confirm that export momentum remains weak, while imports, despite some monthly volatility, continue to grow on a yearly basis,” Topline Research said in a trade alert issued on January 2.

“This has pushed the half-year trade deficit to levels that pose challenges for external account management.”

Topline Research maintained its FY26 projections, expecting exports to contract by about 1% and imports to grow 13%, in line with targets set by the State Bank of Pakistan.

Analysts cautioned that without a sustained recovery in exports or a moderation in import growth, pressure on the current account and foreign exchange reserves could persist in the coming months.