PIAF Raises Alarm Over Sharp Export Decline, Calls for Urgent Cost Reforms

By Dr. Ansab Ali — Lahore, Pakistan
LAHORE: The Pakistan Industrial & Traders Association Front (PIAF) has expressed grave concern over a sustained decline in Pakistan’s exports, warning that a widening trade gap could place further pressure on the country’s fragile economy unless urgent cost-cutting reforms are implemented.
PIAF Chairman Faheemur Rehman Saigol, along with Senior Vice Chairman Nasrullah Mughal and Vice Chairman Tahir Manzoor Chaudhary, said the latest figures released by the Pakistan Bureau of Statistics (PBS) present a “deeply troubling picture” of the country’s external trade performance, particularly for export-oriented industries.
According to PBS data, exports fell by 20.41 percent year-on-year in December 2025 to USD 2.32 billion, compared with USD 2.91 billion in the same month last year. This marked the fifth consecutive monthly decline, pushing the trade deficit to USD 19.20 billion in the first half of the 2025–26 fiscal year.
Exports also declined by 4.26 percent on a month-on-month basis, while imports surged 13.49 percent in December to USD 6 billion, further widening the trade gap. During the first half of FY2025–26, total exports stood at USD 15.18 billion, down 8.70 percent, while imports rose 11.28 percent to USD 34.4 billion.
Chairman Saigol said the persistent downturn reflects growing pressure on exporters amid subdued global demand and sharply rising domestic costs, particularly energy prices. “Pakistani exporters are losing competitiveness not due to lack of capacity or skill, but because the cost of doing business has become unsustainable,” he said.
PIAF highlighted a steep decline in textile and food exports, two major components of Pakistan’s export basket. Textile exports fell nine percent, while food exports plunged 35 percent. Although textile and apparel exports recorded marginal growth of one percent to USD 9.19 billion in the first half of the fiscal year, the association cautioned that the trend may not be sustainable without policy support.
Senior Vice Chairman Nasrullah Mughal said high electricity tariffs remain the biggest challenge for the textile sector. “With electricity costs averaging 12 cents per unit, Pakistani textiles cannot compete internationally, where regional rivals operate at 7 to 8 cents,” he said, adding that rising LNG prices have further increased costs for industries relying on captive power generation.
Vice Chairman Tahir Manzoor Chaudhary pointed to structural weaknesses in agricultural and food exports, which fell to USD 2.62 billion in the first half of the fiscal year from USD 4.06 billion a year earlier. He called for targeted export incentives, improved access to financing and predictable energy pricing.
While noting some resilience in services exports, PIAF warned that the growing trade and services deficits pose long-term risks to macroeconomic stability.
The association urged the government to rationalise energy tariffs, reduce export-related taxes, ensure uninterrupted power supply and adopt a consistent export-led growth strategy. Without swift intervention, PIAF warned, Pakistan risks losing further global market share at a time when foreign exchange earnings are critically needed.