Editorial
In the first half of 2024-25, Pakistan’s merchandise exports have achieved a remarkable growth of 10.5%, marking a significant improvement compared to previous years. This uptick is particularly noteworthy when contrasted with the 5.2% growth in 2023-24 and the decline of 5.7% in 2022-23. Furthermore, amidst sluggish global trade growth of only 3.3% in 2024, Pakistan’s performance stands out.
The surge in exports has not been uniform across all sectors. Agricultural exports have emerged as the frontrunner, nearing a 20% increase, primarily fueled by rice exports, which skyrocketed by over 35% due to an impressive crop yield of nearly 10 million tons. With India imposing a temporary rice export ban, Pakistan seized the opportunity to expand its market share.
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Textiles, another key sector, also reported commendable growth, primarily in value-added products. Knitwear exports soared by 19%, while ready-made garments increased by 21% due to both higher prices and increased quantities. Despite these successes, textiles still account for 55% of total exports, illustrating a concerning lack of diversification.
While there are promising sectors such as fish, vegetables, and pharmaceuticals that could potentially generate between $500 million to $1 billion annually, the broader export landscape faces challenges. Fixed nominal exchange rates and exorbitant electricity prices have hindered competitiveness, with costs significantly higher than those in neighboring countries like India.
Additionally, the withdrawal of vital export incentives and tax benefits, influenced by IMF directives, has stifled growth. In contrast, Bangladesh, also under an IMF program, continues to thrive with robust export incentives, showcasing the disparity in support for exporters between the two nations. To align export potential with ambitious targets, Pakistan must advocate for equitable treatment and revamp its export strategy to compete effectively in global markets.