- The share of exports falls to just over 10%.
- High prices harm productivity and wages
- American rights can cost $ 1.4 billion a year.
Karachi: The drop in export performance in Pakistan, despite years of pricing protection, threatens its competitiveness and its long -term economic prospects, warned the World Bank in its latest policies assessment.
Exports were reduced to just over 10% of GDP in 2024, compared to more than 15% in the 1990s – one of the lowest shares in the region and among intermediate income savings.
In the report entitled “from the inside to the outside: the transition from Pakistan to the growth led by export”, the World Bank said that the slide reflects the worsening of constraints on businesses, aggravated by recent changes in policy to higher rates.
“Pakistan’s tariff structure – characterized by high -matter protection rates, cascading import duties and ad hoc exemptions – has become an obstacle to export growth,” said the report, noting that tariff rates have increased in a constant manner since their reached in the early 2000s.
Exports of goods from Pakistan increased 6.25% in annual sliding to 26.86 billion dollars in the first 10 months of fiscal year 25, according to data published by Pakistan Bureau of Statistics (PBS) earlier this month.
The World Bank’s evaluation has highlighted the structural weaknesses of Pakistan’s commercial policy and recommended the transfer of the pricing authority of the Federal Board of Rété (FBR) to the National Council of Prices.
He also proposed to establish a national regulatory delivery office to rationalize the implementation of policies and reduce administrative formalities.
While the World Bank welcomed the launch of Uraan Pakistan – the government’s five -year plan for reforms and economic growth – in December 2024, it warned that tariff reforms must be accompanied by wider structural changes to make the economy more competitive.
The report also underlined a difficult commercial climate marked by a poorly aligned exchange rate regime, high energy costs, regulatory complexity and limited access to credit.
He warned that high import duties on raw materials and intermediate goods have eroded the productivity, sales and wages of companies.
Exports from Pakistan is faced with another major threat of reciprocal prices now on the maintenance up to 29% announced by US President Donald Trump.
Pakistan Institute of Development Economics (PIDE), a reflection group affiliated with the planning commission, warned that the reciprocal price on Pakistan could lead to a drop in exports to the United States in the range of 20 to 25% resulting in an annual loss of $ 1.1 billion to $ 1.4 billion.