ISLAMABAD: Pakistan’s merchandise exports rose 10.54 per cent to $30.64 billion in 2023-24 from $27.72bn in the preceding year, according to data released by the Pakistan Bureau of Statistics (PBS) on Tuesday.

Exports increased steadily from July 2023 until they turned negative in January. This negative trend persisted until April. After a temporary setback, growth regained momentum in May and continued into June.

The country witnessed its highest-ever exports in 2021-22, reaching a staggering $31.78bn. However, the following year saw a decline, with exports dropping to $27.54bn.

A range of initiatives implemented by the caretaker government resulted in a significant boost to exports which jumped to $30.65bn in FY24.

Trade gap widens 30pc to $2.39bn in June

In June, exports reached $2.53bn, up from $2.35bn in the same month last year, indicating a growth of 7.34pc. However, they saw a decline of 10.92pc month-on-month.

Exports have witnessed a negative growth of 8.38pc, 0.39pc, 7.49pc and 1.06 in April, March, February and January, respectively. However, it recorded an increase of 19pc in May. The projected export target for FY25 is $32.3bn, representing a modest increase of 6.6pc.

Exporter associations have cautioned the government about the potential negative impact of the tax measures outlined in the budget 2024-25. They believe these steps could result in a decline in the country’s export earnings.

There is concern that exporters may declare a lower value of their proceeds to reduce their tax payments. Additionally, this practice of under-invoicing will result in a loss of foreign exchange earnings from exports to other countries.

Trade deficit

According to the PBS data, imports fell 0.84pc to $54.73bn in FY24 compared to $55.19bn in FY23. However, in June, imports stood at $4.91bn as against $4.18bn over the corresponding month of last year, indicating a growth of 17.43pc.

The import target for FY25 is projected at $57.3bn.

The trade deficit widened by 30.39pc to $2.39bn in June from $1.83bn in the corresponding month last year. However, the trade gap narrowed to $24.08bn in FY24 from $27.47bn over the previous year.

Rising exports might bring some joy to the government which has set an ambitious target to increase exports to $100bn by the end of FY28. The International Monetary Fund (IMF) however doesn’t share the Commerce Ministry’s optimism as its projections for the next five years, during the first review of the previous $3bn Stand-by Arrangement, were way below the $100bn mark.

The Fund anticipated that Pakistan’s exports will gradually increase from $30.84bn in FY24 to $32.35bn in FY25, $34.68bn in FY26, $37.25bn in FY27 and $39.46bn in FY28.

The IMF’s target appears more realistic as, according to the data, exports recorded an average monthly growth of 3.03pc during the outgoing fiscal year.

Published in Dawn, July 3rd, 2024