Pakistan’s imports are inching up again. Excluding the commodity supercycle year (FY22), imports are nearing their highest historical levels. This is not the first time the country has experienced such an upward cycle.

However, what sets the current trend apart is that the rise in imports is not accompanied by robust GDP growth. The economy is barely expanding at 2–2.5 percent in FY25, yet import volumes are approaching levels seen in FY18, when GDP growth was above 5 percent.

While imports remain high in absolute dollar terms, they represent 14.1 percent of GDP, which is below the 17 percent level recorded in FY18.

The concern lies not in the ratio itself, but in the underlying reality: nominal GDP may be growing, but Pakistan’s capacity to finance its external obligations is not keeping pace. The demand for foreign exchange is rising yet reserves remain stagnant. External debt and foreign direct investment have been flatlined, further constraining financing ability.

The central challenge is how to transition from stabilization to a growth trajectory, a shift that cannot happen without higher external inflows. Over the past two years, the macroeconomic model........

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