ISLAMABAD: Pakistan’s merchandise exports slowed for the second consecutive month in December due to a steep fall in international demand, according to data released by the Pakistan Bureau of Statistics on Wednesday.
The growth momentum picked pace in July owing to improved orders and stability in the exchange rate. Demand from North America and European countries is anticipated to pick up pace from January onwards.
The exports grew 11.83pc in July, followed by 16pc in August, 13.52pc in September, 10.64pc in October, 8.98pc in November and 0.67pc in December.
Pakistan Textile Exporters Association Patron-in-Chief Khurram Mukhtar told Dawn that historically, exports slowed down in December due to holidays. He mentioned that US President-elect Donald Trump has announced possible tariff increases on Chinese and South American products. Mr Mukhtar added that US retailers and buyers are visiting Pakistan to place orders, with many orders already in the pipeline.
Trade deficit soars 35pc to $2.44bn
The exports reached $2.84bn in December against $2.82bn in the corresponding month last year. On a month-on-month basis, exports slightly increased 0.28pc.
In the first half of FY25, export proceeds stood at $16.56bn in July-December FY25 as against $14.98bn over the corresponding months of last year, showing an increase of 10.52pc.
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.
Mr Mukhtar mentioned that the Federal Board of Revenue has cleared the sales tax refunds for exporters, but payments under other categories are still pending. He emphasised that the government needs to address the issues of energy and capital to help exporters meet international buyers’ export orders.
According to the exporters, high input costs squeeze their margins and limit their capacity to reinvest and expand operations. The Ministry of Commerce has already submitted a range of proposals to the prime minister to facilitate exports from the country.
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 6.11pc to $27.73bn in July-December FY25 from $26.14bn over the last year. Imports surged to $5.28bn in December from $4.50bn last year. Month-on-month, imports increased 17.44pc.
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-December FY25 increased by 0.18pc to $11.17bn from $11.15bn over the last year. In December, the deficit increased by 34.80pc to $2.44bn from $1.82bn last year. The trade gap contracted to $24.08bn in FY24 from $27.47bn in the preceding year.
Published in Dawn, January 2nd, 2025
