Pakistan’s economy is currently grappling with a significant decline in merchandise exports, which have dropped by approximately $2 billion in the fiscal year 2026. Despite this setback, the overall export figures remain buoyed by robust growth in the IT and services sectors, which are expected to offset the losses in goods shipments.
According to recent data from Topline Securities, the total goods exports for Pakistan are projected to be around $30 billion for FY26, reflecting a 6% decrease compared to the previous year. This decline is primarily attributed to a sharp fall in rice exports, which had previously reached record levels.
Decline in Merchandise Exports
The Pakistan Bureau of Statistics (PBS) has reported a notable decrease in merchandise exports, with rice exports alone dropping by over $1 billion. This decline is largely due to the normalization of global prices following the easing of export restrictions by India, coupled with reduced export volumes. Additionally, other agricultural commodities and non-textile products have also faced challenges, contributing to the overall decline.
Stability in Textile Exports
While the overall merchandise exports have suffered, the textile sector has shown relative stability. Value-added textile products have experienced some improvement, although this has not been sufficient to counterbalance the declines seen in other export categories. The textile industry remains a crucial component of Pakistan’s export economy, and its performance is vital for the country’s trade balance.
Growth in Services Sector
On a more positive note, the services sector in Pakistan is expected to thrive, particularly in the fields of IT and IT-enabled services. Projections indicate that services exports could grow by nearly 20%, which will play a significant role in maintaining the country’s total goods and services exports close to the $40 billion mark.
Overall Export Performance
Despite the challenges faced by the merchandise sector, Pakistan’s total goods and services exports have shown resilience in recent years. From $38.5 billion in FY2024 to $40.4 billion in FY2025, the total exports are expected to stabilize around $40.1 billion for FY2026. This trend highlights the importance of diversifying export sources and enhancing the performance of the services sector.
Future Outlook
The upcoming release of the State Bank of Pakistan’s Balance of Payments data will provide a more comprehensive view of the export landscape, as it records actual foreign exchange inflows. This data is anticipated to shed light on the ongoing trends and challenges within the export sector, helping policymakers and stakeholders make informed decisions moving forward.
Key Takeaways
- Merchandise exports declined by approximately $2 billion to around $30 billion in FY26.
- Rice exports fell by over $1 billion due to normalized global prices.
- Textile exports remained stable, with improvements in value-added products.
- Services exports, particularly in IT, are projected to grow by nearly 20%.
- Total goods and services exports are expected to be close to $40 billion.
