KARACHI – The World Bank has raised concerns over Pakistan’s declining export performance, warning that it threatens the country’s competitiveness and long-term economic stability. In a new report, the Bank called for urgent reforms to support export-led growth.
According to the report titled *“From Inward to Outward: Pakistan’s Shift Towards Export-led Growth”*, Pakistan’s exports have dropped to just over 10% of GDP in 2024, down from over 15% in the 1990s. This places Pakistan among the lowest in the region and in middle-income countries.
The World Bank blamed Pakistan’s complex tariff structure for stifling exports. It said rising protectionist policies—such as cascading duties and selective exemptions—have created barriers that reduce productivity and discourage innovation in the export sector.
Though Pakistan’s goods exports increased by 6.25% year-on-year to \$26.86 billion in the first ten months of FY25, the Bank noted that this growth remains far below potential. It urged shifting tariff-setting powers from the Federal Board of Revenue (FBR) to the National Tariff Board for greater policy coherence.
In addition, the World Bank recommended establishing a National Regulatory Delivery Office to improve business conditions, cut red tape, and support export-focused enterprises. It also stressed the need to align the exchange rate, reduce energy costs, and expand access to credit.
While welcoming Pakistan’s Uraan Pakistan reform plan, launched in December 2024, the Bank cautioned that tariff reforms must be part of broader structural changes. The report also highlighted risks from potential US tariffs of up to 29%, which remain on hold but could impact Pakistan’s trade if implemented.