Pakistan says $30 billion goods export base not enough to sustain growth

KARACHI: Pakistan requires substantial expansion and diversification of its roughly $30 billion goods‑export base to sustain economic growth and prevent recurrent balance‑of‑payments pressures, saying Finance Minister Muhammad Aurangzeb highlighted on Monday the government’s rollout of new exporter support measures.

Throughout recent years, Pakistan has oscillated between periods of rapid growth and mounting import demand, which strains its external account. The government aims to break this pattern by steering the economy toward a model anchored in export‑driven development and private investment.

Aurangzeb voiced concern over a strong export performance, speaking at an event during which the state‑owned Export‑Import Bank of Pakistan (Pak EXIM) signed two agreements to broaden export financing and risk protection, including an approximately Rs 3 billion ($10.6 million) facility targeting small and medium‑sized exporters.

“Growth merely incremental beyond the current $30 billion foundation would fall short of Pakistan’s objectives,” he emphasized, according to a finance‑ministry statement, stressing the need to raise both the volume and quality of exports through diversification into new markets, product sectors, and service offerings.

The economy posted robust 3.7 percent growth in the fiscal year ending June, while the fiscal deficit contracted to 2.6 percent of GDP—the lowest level recorded in 22 years, per the finance ministry.

Aurangzeb said the moment arrives to shift away from cyclical booms and busts driven primarily by import dependence and frequent balance‑of‑payments shocks linked to rapid growth accelerations.

He observed that the administration seeks to leverage fiscal and external space generated by recent stabilization efforts to spur private investment, boost productive capacity, and enhance exports while reducing exposure to external financing constraints.

In parallel, Pakistan’s information‑technology sector has become a notable source of foreign exchange, generating about $4.6 billion in the last fiscal year.

The Export Development Fund and Pak EXIM launched an approximate Rs 3 billion SME Risk Pool to provide smaller exporters greater access to insurance covering buyer default risk. This initiative aims to bolster confidence among smaller firms and enable them to explore new customer bases and markets.

Pak EXIM also concluded a reinsurance pact with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a member of the Islamic Development Bank Group. The agreement is meant to enlarge Pak EXIM’s capability to underwrite trade and export credit insurance against commercial and political risks inherent in international commerce.

“The ICIEC reinsurance partnership will markedly strengthen Pak EXIM’s underwriting capacity, whereas the EDF SME Risk Pool expands access to non‑payment protection for SMEs and empowers them to expand into new markets with greater certainty,” said Pak EXIM President and CEO Shahbaz Hussain Syed.

Aurangzeb reported that exporters continued to secure financing at a 4.5 percent rate even as Pakistan’s policy rate shifted amid ongoing inflationary pressure.

He further cited forthcoming actions in the fiscal 2026‑27 budget, among them the elimination of an advance export tax, reductions to the super‑tax levy, and initiatives to improve energy cost‑competitiveness.

The finance minister stressed that the long‑standing debate over export‑led growth must now be translated into concrete implementation, requiring coordinated effort from exporters, commercial banks, Pak EXIM, the Export Development Fund, the central bank, and the government. Success will be measured by the actual increase in financing capacity, risk protection mechanisms, and new exporters, markets, and volumes.

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