Pakistan's completely knocked down (CKD) imports have risen to their highest level since March 2022.

According to media sources, the sharp increase in CKD imports reflects improving activity among local vehicle assemblers as demand for automobiles recovers across the country.

CKD kits consist of imported vehicle parts used by domestic assemblers for local vehicle production. Higher imports of these kits generally indicate increased manufacturing activity and stronger vehicle sales in Pakistan.

The automotive sector faced significant pressure during 2023 and early 2024 due to import restrictions, currency depreciation, elevated interest rates, and weak consumer purchasing power.

Several automakers reduced production volumes or temporarily suspended plant operations because of difficulties related to opening letters of credit (LCs) and securing imported components.

Conditions have gradually improved over the past year following the return of relative economic stability and the easing of import restrictions.

The sharp rise in CKD imports is also contributing to Pakistan's increasing import bill. Continued import growth could place additional pressure on the country's current account if export growth does not increase at a similar pace.