Farooq Awan

Pakistan’s sustained export slowdown is increasingly eroding the country’s position in global markets, as consecutive monthly declines in export earnings point to weakening competitiveness and reduced presence in key export destinations. The prolonged contraction reflects not only cyclical pressures but also deeper challenges affecting Pakistan’s ability to maintain and expand its share in international trade.

Data released by the Pakistan Textile Exporters Association (PTEA), based on official trade statistics, show that Pakistan’s exports declined by 20.41 percent year-on-year to $2.31 billion in December 2025, compared to $2.91 billion in the same month last year. The December decline marked the fifth consecutive month of falling export earnings in the current fiscal year, highlighting a persistent downward trend rather than a short-term correction.

Monthly export data underline the scale and consistency of the slowdown. Export proceeds fell by 12.49 percent in August, followed by declines of 3.88 percent in September and 4.46 percent in October. The contraction intensified in November, when exports dropped by 14.54 percent, before weakening further in December. This sequence of declines indicates sustained loss of momentum across multiple months, raising concerns about Pakistan’s ability to compete effectively in international markets.

The half-year performance reinforces these concerns. During the July–December period, exports declined by 8.70 percent to $15.18 billion, down from $16.63 billion in the corresponding period of the previous year. A contraction of this magnitude over six months suggests that Pakistan is losing ground to regional and global competitors at a time when maintaining market presence is critical for long-term export growth.

The erosion of global market position has broader implications beyond headline trade figures. As export volumes and values decline, international buyers may increasingly turn to alternative suppliers offering greater reliability, competitive pricing, or higher value-added products. Once lost, such market positions can be difficult to regain, particularly in highly competitive sectors where long-term buyer relationships and supply chain integration play a decisive role.

The data highlight concerns that persistent export weakness undermines Pakistan’s competitiveness and allows regional competitors to capture key export markets. Reduced export performance can weaken incentives for innovation, quality enhancement, and technological upgrading, all of which are essential for sustaining export growth in an increasingly demanding global marketplace. Without consistent export demand, firms may delay or cancel investments aimed at improving productivity and product standards.

The continued export slowdown also interacts with rising imports, intensifying competitive pressures on domestic producers. As imports increase, local industries face both external competition abroad and heightened competition at home, further constraining their ability to scale up and improve export readiness. This dual pressure can accelerate the loss of market share if export performance fails to stabilise.

Overall, the data suggest that Pakistan’s prolonged export contraction is gradually eroding its standing in global trade. The combination of consecutive monthly declines and a weaker half-year performance points to a loss of momentum that extends beyond short-term volatility. Unless export trends reverse, the sustained slowdown risks weakening Pakistan’s global market position, making it more challenging to reclaim lost ground and secure durable export growth in the future.

Credit: INP-WealthPk