ISLAMABAD: Pakistan’s merchandise exports fell by 8.93% year-on-year in April, marking the second month of negative growth in the current fiscal year, according to data released by the Pakistan Bureau of Statistics (PBS) on Friday. The latest dip signals a deepening slowdown in export momentum, which had already shown signs of weakening over recent months.
After falling by 5.57% in February, exports briefly rebounded in March with a modest 3.08% increase, only to slip back into contraction territory in April. The decline dragged monthly export receipts down to $2.14 billion, compared to $2.35 billion in April 2024. Month-on-month, exports registered a sharp 19.05% fall.
Despite these setbacks, cumulative export earnings for the first 10 months of FY25 (July–April) rose 6.25% to $26.86 billion, up from $25.27 billion in the same period last year. Export performance earlier in the fiscal year had shown promising signs, with double-digit growth from July through November.
Growth Trends and Policy Challenges
Export growth began the fiscal year strongly, posting 11.83% in July, followed by 16% in August, 13.52% in September, and 10.64% in October. However, the pace began to slow, hitting 0.67% in December and recovering slightly to 4.59% in January before eventually turning negative in subsequent months.
While the declining trend may raise alarms for policymakers, the Ministry of Commerce has not publicly expressed concern. However, with the federal budget approaching, there is growing anticipation that new measures may be introduced to revive export growth, particularly in the textile sector — Pakistan’s largest foreign exchange earner.
The ministry is also assessing the potential impact of recent U.S. tariff increases, which could affect Pakistan’s textile exports to its largest market.
Sectoral Pressures and Headwinds
While Pakistan has benefited from global buyers shifting textile sourcing from Bangladesh and China, domestic challenges threaten to undermine these gains. The recent hike in gas tariffs for captive power plants and a phased 20% levy on natural gas and RLNG supplied to the textile industry are expected to negatively impact production costs and export competitiveness in the months ahead.
In FY24, Pakistan’s total merchandise exports rose by 10.54%, reaching $30.64 billion, compared to $27.72 billion in FY23.
Trade Deficit Widens Amid Rising Imports
Pakistan’s trade deficit widened by 8.81% in the July–April period of FY25, reaching $21.35 billion, compared to $19.62 billion in the same period last year. The gap surged further in April alone, jumping 35.79% year-on-year to $3.38 billion, from $2.49 billion in April 2024.
Imports have played a significant role in this expansion. Total imports rose 7.37% during the 10-month period, climbing to $48.21 billion, up from $44.90 billion last year. In April, monthly imports hit $5.53 billion, marking a 14.09% increase compared to the same month in 2024. Month-on-month, imports also rose 14.52%.
In contrast, total imports for FY24 declined marginally by 0.84%, down to $54.73 billion from $55.19 billion in FY23.
The International Monetary Fund (IMF) has adjusted its import forecast for FY25 downward from $60.5 billion to $57.2 billion, closely aligning with the Pakistani government’s own projection of $57.3 billion.
Despite the recent shortfalls, policymakers now face the dual challenge of stimulating export growth while managing a widening trade gap, all amid shifting global trade dynamics and domestic fiscal constraints.
