PAKISTAN’S merchandise exports have been experiencing a pronounced decline for the last several months, with November trade data of the Pakistan Bureau of Statistics showing a significant 15.4pc year-on-year dip from $2.8bn to roughly $2.4bn. The downward momentum is particularly worrisome, as the decline in November marks the fourth consecutive monthly contraction since August this fiscal year; it exposes structural weaknesses in the fragile export sector. The downturn also indicates that the decline may be more than a temporary blip. Overall, export proceeds have fallen by 6.39pc to $12.84bn during the first five months of the current fiscal to November from $13.72bn a year ago. Imports, on the other hand, continue to surge, fuelled by an uptick in economic activities, jumping to $28.32bn from $24.99bn. If the trend holds it will further expand the trade gap, which has already ballooned by 37.2pc to $15.47bn this year, creating acute pressure on the home currency going forward.

The reduced export flow is believed to be driven by a weakened global demand for goods exported from Pakistan, as well as the prohibitive cost of doing business — especially higher energy prices and excessive taxation — eroding the competitive advantage of our exporters over their regional competitors. The consecutive negative export growth has already triggered calls for currency devaluation and interest rate cuts to help exporters restore their price competitiveness in foreign markets and retain their existing share. For over two decades, governments have used rising remittances to finance their imported consumption instead of addressing the core challenges facing the stressed export sector through structural productivity reforms. This is not sustainable. Pakistan’s exports will continue to struggle to compete internationally unless energy costs are substantially slashed, taxes rationalised and the ease of doing business improved. The government has repeatedly claimed prioritising a sustainable export-oriented growth strategy, ditching decades-old consumption-driven growth policies. It has recently received recommendations from the private sector on removing policy impediments to export growth. It has announced the removal of 0.25pc development surcharge on exports, significantly boosting firms’ liquidity. Yet the speed of reforms is painfully slow. Our chances of breaking out of the low-growth trap will remain slim unless we can boost exports sustainably and at scale. Until then, job creation and poverty alleviation will be hard to achieve.

Published in Dawn, December 4th, 2025