Pakistan’s merchandise exports rose by 10.54% to $30.64 billion in the fiscal year 2023-24, up from $27.72 billion the previous year, according to data released by the Pakistan Bureau of Statistics (PBS). The export growth was steady from July 2023 until January when it turned negative, persisting through April. However, growth regained momentum in May and continued into June. The highest-ever exports were recorded in 2021-22 at $31.78 billion, but they dropped to $27.54 billion the following year. Various initiatives by the caretaker government significantly boosted exports, which jumped to $30.65 billion in FY24.
In June, exports reached $2.53 billion, up from $2.35 billion in the same month last year, indicating a growth of 7.34%. However, on a month-on-month basis, exports saw a decline of 10.92%. Exports had negative growth in April (8.38%), March (0.39%), February (7.49%), and January (1.06%). There was a 19% increase in May. The projected export target for FY25 is $32.3 billion, representing a modest increase of 6.6%.
Exporter associations have cautioned the government about the potential negative impact of the tax measures outlined in the 2024-25 budget, fearing these steps could lead to a decline in export earnings. There is concern that exporters may declare a lower value of their proceeds to reduce their tax payments, leading to a loss of foreign exchange earnings from exports.
According to PBS data, imports fell by 0.84% to $54.73 billion in FY24 compared to $55.19 billion in FY23. In June, imports stood at $4.91 billion, up from $4.18 billion in the corresponding month of last year, indicating a growth of 17.43%. The import target for FY25 is projected at $57.3 billion. The trade deficit widened by 30.39% to $2.39 billion in June from $1.83 billion in the corresponding month last year. However, the trade gap narrowed to $24.08 billion in FY24 from $27.47 billion the previous year.
Rising exports might bring some optimism to the government, which has set an ambitious target to increase exports to $100 billion by the end of FY28. The International Monetary Fund (IMF) does not share the Commerce Ministry’s optimism, projecting that Pakistan’s exports will gradually increase from $30.84 billion in FY24 to $32.35 billion in FY25, $34.68 billion in FY26, $37.25 billion in FY27, and $39.46 billion in FY28. The IMF’s target appears more realistic as exports recorded an average monthly growth of 3.03% during the outgoing fiscal year.
