Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 21 Metals Group rose modestly by 3.9 percent to US$4,315 million. Textile imports fell sharply by 27.5 percent to US$2,714 million, indicating reduced demand or local substitution. The Transport and Miscellaneous Groups grew slightly, by 4.7 percent and 2.9 percent, reaching US$1,840 million and US$894 million, respectively. Top 20 Imports Commodities during FY2024 Commodity Export (Million US$) % Change FY 2024 FY 2023 GRAND TOTAL 54,779 55,198 -0.8 PETROLEUM PRODUCTS 6,644 7,628 -12.9 PETROLEUM CRUDE 5,531 4,947 11.8 NATURAL GAS, LIQUIFIED 3,946 3,764 4.8 PALM OIL 2,779 3,641 -23.7 PLASTIC MATERIALS 2,271 2,273 -0.1 IRON AND STEEL 2,043 1,890 8.1 ELECTRICAL MACHINERY & APPA RATUS 3,275 1,674 95.7 RAW COTTON 448 1,679 -73.3 MEDICINAL PRODUCTS 1,087 1,329 -18.2 IRON AND STEEL SCRAP 1,230 1,152 6.8 WHEAT UNMILLED 1,032 1,072 -3.8 MOTOR CYCLE (CKD/SKD) 1,009 1,076 -6.2 PULSES 775 946 -18.1 PETROLEUM GAS, LIQUIFIED 789 675 16.9 SYNTHETIC & ARTIFICIAL SILK YARN 605 583 3.8 FERTILIZER MANUFACTURED 685 604 13.3 TEA 657 569 15.4 MOBILE PHONE 1,899 570 233.1 POWER GENERATING MACHINERY 418 500 -16.5 SYNTHETIC FIBRE 494 485 1.9 An analysis of Pakistan’s top 20 import commodities, which accounted for 68.7 percent of total imports during FY2024, highlights significant shifts in the country’s import priorities. The most dramatic increase was in mobile phones, with the import bill soaring by 233.1 percent, likely driven by rising consumer demand and technological upgrades. Imports of electrical machinery and apparatus also surged by 95.7 percent, reflecting the growing focus on industrialization and infrastructure development. Meanwhile, the import of liquefied petroleum gas (LPG) rose by 16.9 percent, underscoring the country’s reliance on energy imports. Essential consumer goods such as tea and manufactured fertilizers saw more modest increases, with import bills rising by 15.4 percent and 13.3 percent, respectively, due to steady demand in the domestic market. Figure 3: Country’s Percentage Share in Pakistan’s Import During FY 2024 Country-wise analysis shows, China remained top on the imports list followed by United Arab Emirates, Saudi Arabia, Qatar, Indonesia, and Kuwait during FY24. The combined share of these twenty countries in total imports during this period remained at level of 84.8 percent. China shares in total imports is 27.0 percent followed by United Arab Emirates (9.2 percent) and Saudi Arabia (8.7 percent). Figure 4: Percentage Share of Import by Product Category during FY 24 The import composition for FY24 reveals that Intermediate Goods held the largest share at 61.0 percent, underscoring their importance in domestic
22 Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y production and industrial processes. Consumer Goods accounted for 32.3 percent of imports, reflecting significant demand for finished products in the market. Meanwhile, Capital Goods represented the smallest share, at 6.7 percent, indicating limited imports of machinery and equipment for long-term investment. Trade Deficit During FY 2024, total exports increased by 10.6 percent, rising from $27.724 billion to $30.675 billion, reflecting improved external demand or enhanced competitiveness. In contrast, total imports slightly declined by 0.8 percent, from $55.198 billion to $54.779 billion, indicating subdued domestic demand or import substitution efforts. The trade balance showed a deficit of $24.104 billion, narrowing by 12.3 percent compared to the previous fiscal year’s $27.474 billion deficit, highlighting progress in addressing the trade gap. Indicators FY 2024 (Billon US$) FY 2023 (Billon US$) % Change TOTAL EXPORT 30.675 27.724 10.6 TOTAL IMPORT 54.779 55.198 -0.8 TRADE BALANCE -24.104 -27.474 -12.3
Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 23
Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y 25 SECTION-1 2024 1. EXPORTS OF PAKISTAN During July-August 2023, the external sector faced several challenges, including a growing financing gap, high volatility in the foreign exchange market, tightening global financial conditions and heightened domestic uncertainty. These factors negatively affected foreign exchange reserves and added pressure on the exchange rate and export sector. However, the crackdown on illegal currency activities, such as foreign exchange smuggling, along with reforms introduced by the SBP for exchange companies, contributed to the appreciation of the PKR from September 2023, onwards. The reduced pressure on the exchange rate, combined with sustained improvements in the export position led to a gradual stabilization. Table 1:Monthly Exports of Pakistan FY2024 Commodity Export (Million US$) % Change FY 2024 FY 2023 JULY 2,064 2,250 -8.3 AUGUST 2,366 2,483 -4.7 SEPTEMBER 2,471 2,437 1.4 OCTOBER 2,689 2,384 12.8 NOVEMBER 2,573 2,389 7.7 DECEMBER 2,822 2,301 22.6 JANUARY 2,792 2,237 24.8 FEBRUARY 2,583 2,189 18 MARCH 2,567 2,367 8.5 APRIL 2,351 2,135 10.1 MAY 2,839 2,197 29.2 JUNE 2,558 2,356 8.6 TOTAL EXPORT 30,675 27,724 10.6 Pakistan’s export performance in FY 2024 showed notable growth, with a 10.6 percent increase, reaching US$30.675 billion, compared to US$27.724 billion in the previous year. Despite global economic challenges such as high energy costs and supply chain disruptions, Pakistan managed to achieve positive growth due to targeted government policies and favourable conditions in the agricultural sector. In FY 2024, monthly export performance displayed mixed trends, with initial declines followed by significant growth later in the year. Exports in July and August fell by 8.3 percent and 4.7 percent, reaching US$2,064 million and US$2,366 million, respectively. September marked a modest recovery, with a 1.4 percent increase to US$2,471 million. The upward momentum continued in October and November, with exports rising by 12.8 percent and 7.7 percent, respectively, compared to FY 2023. December saw a remarkable 22.6 percent growth, achieving US$2,822 million, the highest monthly increase in the first half of the fiscal year. Figure 5: Monthly Export of Pakistan The upward trend continued into 2024, with January achieving the highest growth rate of 24.8 percent. February and March maintained double-digit increases of 18 percent and 8.5 percent, respectively. April exports rose by 10.1 percent, while May recorded the highest growth at 29.2 percent. Despite a slight slowdown, June exports still grew by 8.6 percent, demonstrating overall resilience and recovery in export activity during FY 2024. KEY DRIVERS BEHIND PAKISTAN’S EXPORT GROWTH Key drivers behind Pakistan’s export growth in FY 2024 include: • Diversification into Non-Traditional Markets A strategic shift towards increasing exports to non- traditional markets where exports surged like Indonesia (275.4 percent), Malaysia (97.6 percent), Viet Nam (75.8 percent), Sri Lanka (31.6 percent), Saudi Arabia (24.0 percent), Kenya (22.4 percent), Poland (21.1 percent), Afghanistan (16.8 percent), China (15.8 percent) and United Arab Emirates (13.6 percent).
26 Annual Analytical Report on External Trade Statistics of Pakistan 2 0 2 4 F Y Table 2: Top 20 Export Destination of Pakistan during FY2024 Country Export (Million US$) % Change FY 2024 FY 2023 Total 30,675 27,724 10.6 U.S. America 5,292 5,176 2.2 China 2,574 2,222 15.8 United Kingdom 2,019 1,935 4.3 United Arab Emirates 1,581 1,391 13.6 Germany 1,562 1,553 0.5 Netherlands 1,486 1,560 -4.7 Spain 1,410 1,410 0 Afghanistan 1,140 977 16.8 Italy 1,121 1,165 -3.8 Bangladesh 719 725 -0.8 Saudi Arabia 699 563 24 Belgium 647 725 -10.8 Malaysia 608 308 97.6 Indonesia 535 142 275.4 France 471 496 -5.1 Poland 420 347 21.1 Viet Nam 408 232 75.8 Canada 392 361 8.7 Sri Lanka 386 294 31.6 Kenya 382 312 22.4 Others 6,825 5,830 17.1 • Textile and Apparel Sector Although textiles faced challenges from rising energy prices, they continued to be a backbone of the export sector. There was also a focus on increasing the export of non-textile items, which contributed to diversification. CHALLENGES TO EXPORT GROWTH Pakistan’s export growth faces several challenges that hinder its ability to fully capitalize on global market opportunities. Some of the key challenges include: • High Energy Cost: Energy costs, particularly electricity and gas, have surged in recent years, creating a significant burden on major export sectors such as textiles. The textile industry, which accounts for over half of the country’s exports, has been especially affected by rising energy prices, limiting production capacity and competitiveness. • Inflation: Domestic inflation has been a persistent issue, driving up the cost of raw materials and production. Rising costs of inputs such as cotton, chemicals and packaging materials have increased the overall production expenses for exporters. Inflation also affects the purchasing power of local suppliers, reducing their ability to invest in technology and machinery to enhance productivity. • Global Supply Chain Disruptions: Disruptions in global supply chains caused by events like the COVID-19 pandemic and the Russia-Ukraine conflict, have severely impacted export timelines and costs. Delays in shipping, higher freight charges and shortages of shipping containers have all contributed to increased costs for exporters and made it harder to fulfil international orders on time. • Currency Volatility: The Pakistani rupee has experienced significant depreciation against major currencies particularly the US dollar. While a weaker currency can make exports more competitive, it also increases the cost of imported inputs necessary for manufacturing export goods such as machinery, fuel, and certain raw materials. This volatility adds uncertainty for exporters, complicating pricing strategies and long-term contracts. • Limited Market Diversification: Although there has been some progress in expanding exports to non-traditional markets such as China and the Gulf Cooperation Council (GCC), Pakistan still relies heavily on traditional markets like the US and EU for its textile exports. A lack of diversification means that economic slowdowns or policy changes in these markets can significantly impact export earnings. • Lack of Value Addition: Many of Pakistan’s exports, particularly in textiles and agriculture, consist of low-value or raw materials like cotton yarn or unprocessed food products. Limited focus on value addition and high-end manufacturing reduces profitability and keeps Pakistan from competing with countries that export finished goods like Bangladesh or Vietnam. • Limited Technological Advancement: Many export industries in Pakistan lag in adopting advanced technologies, which hampers productivity and innovation. This issue is particularly evident in sectors like textiles and agriculture, where outdated machinery and techniques limit the country’s ability to produce higher- quality goods. • Global Competition: Pakistan faces stiff competition from other developing countries, particularly in the textile sector. Countries like Bangladesh, India and Vietnam have more established
Annual Analytical Report on External Trade Statistics of Pakistan
2 0 2 4
F Y
27
SECTION-1
2024
supply chains, better infrastructure and lower energy
costs, allowing them to offer competitive pricing to
international buyers.
• Over-Reliance on Textiles:
Pakistan’s export portfolio is heavily dominated by the
textile sector, which accounts for more than 50 percent
of total exports. This concentration makes the economy
vulnerable to fluctuations in global demand and changes
in trade policies affecting the textile industry.
• Lack of Trade Agreements:
Pakistan has relatively few free trade agreements
(FTAs) with major trading partners, limiting access to
key markets with favourable tariff terms. Competitor
countries like Vietnam, Bangladesh and India often have
better market access.
Addressing these challenges will require coordinated
efforts from both the government and private sector to
improve energy efficiency, adopt value-added processes
and stabilize the currency, among other reforms.
1.1. Sector-wise Export Performance of
Pakistan in FY 2024
During FY 2024, Textiles Manufactures continued to
dominate exports with US$16,656 million, accounting
for 54.3 percent of total exports, though showing
marginal growth of 0.9 percent compared to FY 2023.
Agricultural and Food Exports surged by 46.8 percent
to US$7,370 million, reflecting robust demand and
increased production, contributing 24.0 percent to
the export share. IT and Software Services Exports saw
a strong growth of 24.1 percent, reaching US$3,223
million and capturing a 41.3 percent share, underscoring
the sector’s rising prominence. Chemicals Exports grew
modestly by 7.9 percent to US$1,497 million, while
Leather and Leather Products Exports declined by 8.9
percent to US$808 million.
Petroleum Exports recorded the highest growth rate
at 80.36 percent, rising from US$221 million to US$398
million, though its share remained 1.3 percent. Surgical
Goods and Medical Instruments Exports slightly declined
by 0.64 percent to US$445 million, while Sports Goods
Exports decreased by 2.09 percent to US$396 million.
Engineering Goods Exports grew significantly by 14.47
percent, reaching US$351 million. Cement Exports also
showed a substantial increase of 40.36 percent, totalling
US$267 million, reflecting improved competitiveness in
these smaller sectors.
Table 3: Sector-wise Exports During FY2024
Sector
Export
(Million US$)
%
Change
YoY
Growth
(%)
FY
2024
FY
2023
Textiles Manufac
tures Exports
16,656
16,502
54.3
0.9
Agricultural & Food
Exports
7,370
5,021
24.0
46.8
IT and Software
Services Exports
3,223
2,597
41.3
24.1
Chemicals Exports
1,497
1,387
4.9
7.9
Leather & leather
Products Exports
808
887
2.6
-8.9
Surgical Goods &
Medical Instruments
Exports
445
447
1.4
-0.6
Petroleum Exports
398
221
1.3
80.4
Sports Goods
Exports
396
405
1.3
-2.1
Engineering Goods
Exports
351
307
1.1
14.5
Cement Exports
267
190
0.9
40.4
Figure 6: Sector-wise Exports During FY2024
1.1.1. Textile Manufactures Exports
Pakistan’s textile sector, a key pillar of its export
economy, has recently encountered significant challenges
stemming from both global and domestic changes.
International disruptions, such as the aftermath of the
Ukraine war and slowing demand in key markets, have
created headwinds for the industry. At the same time,
domestic factors like rising production costs, energy
shortages, and inflation have added pressure. Moreover,
the IMF’s conditionalities, which led to the withdrawal of
key incentives and support measures, have compounded
the difficulties faced by textile exporters.
Despite these challenges, the sector remains vital
to Pakistan’s economy, contributing significantly to
employment and foreign exchange earnings, but its future
growth hinges on navigating these complex challenges.
Despite these obstacles, textile group exports saw a slight
increase of 0.9 percent, reaching US $16.656 billion as
compared to US$16.502 billion during FY 2023. This