The World Bank has cautioned that Pakistan’s exports are shrinking as a share of GDP and remain far below their potential, estimating an untapped export opportunity of nearly $60 billion.
According to the latest Pakistan Development Update, export performance has declined from an average of 16 percent of GDP in the 1990s to about 10.4 percent in 2024, shifting growth reliance toward debt and remittance-led consumption and contributing to Pakistan’s recurring economic cycles.
The report notes that Pakistan, which once outperformed Bangladesh and India in exports, now lags behind both and is also below the average performance of lower- and upper-middle-income economies. The World Bank attributes the decline to high tariffs, complex regulations, costly energy, and weak logistics.
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To close the widening gap between actual exports and export potential, the Bank says Pakistan would need to double its export-to-GDP ratio.
It recommends measures including a market-based exchange rate, stronger trade finance mechanisms, improved logistics and compliance frameworks, broader trade agreements, and enhanced digital and energy infrastructure to support export-led growth, including in fast-growing IT services.
The Bank also advised allowing a deeper and more competitive interbank foreign exchange market, with reduced central bank intervention, greater transparency, and broader participation from exporters, importers, and investors.
