ISLAMABAD: The exports of merchandise contracted 5.57 per cent in February, marking the first negative trend in the current fiscal year, the Pakistan Bureau of Statistics said on Monday.

Growth in export proceeds fell to a single digit in October 2024 and the pace progressively slowed in the following months, eventually leading to a negative trend in February. The slowdown in export proceeds may worry economic policymakers.

Analysts believe that exports often fall from November to January owing to seasonal changes.

The growth momentum in exports from Pakistan picked pace in July 2024 owing to improved orders and stability in the exchange rate. Demand from North America and European countries was anticipated to pick up pace from January onwards.

Trade deficit widened by 33.43pc to $2.29bn

The exports grew 11.83pc in July, followed by 16pc in August, 13.52pc in September, 10.64pc in October, 8.98pc in November, 0.67pc in December and 4.59pc in January.

Textile exporters are optimistic US retailers and buyers are visiting Pakistan to place orders, with many orders already in the pipeline. A similar trend was observed from buyers in the European market.

The exports reached $2.44bn in February against $2.58bn in the corresponding month last year. On a month-on-month basis, exports drastically decreased by 17.35pc.

In the first eight months of FY25, export proceeds stood at $22.02bn against $20.36bn over the corresponding months of last year, an increase of 8.17pc.

Global buyers have redirected clothing sourcing from Bangladesh and China and placed orders with Pakistan in the past few months. It allows exporters to capitalise on the opportunity and capture the market.

The impact of the recent rise in gas tariffs for captive power plants (CPPs) along with a phase-wise 20pc levy on supply of natural gas/RLNG to the textile industry CPPs will be visible in the following months. In FY24, Pakistan’s merchandise exports rose 10.54pc to $30.64bn from $27.72bn in the preceding year.

Trade deficit

According to the PBS data, imports grew 7.40pc to $37.81bn in July-February FY25 from $35.19bn over the last year. Imports surged to $4.74bn in February from $4.31bn last year, an increase of 10.03pc. Month-on-month, imports decreased 9.89pc.

The IMF revised its import forecast downward by $3.3bn from $60.5bn to $57.2bn for FY25, converging with the government’s projection of $57.3bn. In FY24, imports fell 0.84pc to $54.73bn compared to $55.19bn in FY23.

The trade deficit in July-February FY25 increased by 6.33pc to $15.78bn from $14.84bn over the last year. In February, the deficit increased by 33.43pc to $2.29bn from $1.72bn last year. The trade gap contracted to $24.08bn in FY24 from $27.47bn in the preceding year.

Published in Dawn, March 4th, 2025