$100 Billion Export
The International Monetary Fund’s (IMF) first review of the $3 billion Standby Arrangement has raised skepticism about Pakistan’s ambitious five-year strategic plan to achieve a $100 billion export target by the end of the 2027-28 fiscal year. The IMF’s projections, based on nominal growth rates, paint a significantly different picture, projecting more conservative figures for the next five years.
According to the IMF, Pakistan’s exports are expected to see a gradual increase from $30.84 billion in FY24 to $39.46 billion in FY28. This is in contrast to the Ministry of Commerce’s optimistic expectations, which hinge on aggressive growth and a diversified export portfolio.
The IMF report highlights two significant factors influencing its projections: the exclusion of the State Bank of Pakistan from export refinancing schemes and the disparities in gas prices between export and non-export industries. The SBP is set to phase off export refinancing plans, transferring them to the EXIM Bank of Pakistan, which could add value and diversify exports. However, challenges include limited space and high loan rates for subsidizing these initiatives.
The Ministry of Commerce’s ambitious five-year strategy, led by caretaker Commerce Minister Gohar Ejaz, aims for a $100 billion export target, with a significant focus on textile, agriculture, and industrial sectors. However, achieving this goal depends on several critical factors, including access to low-cost energy and the withdrawal of future export subsidies.
To overcome challenges and fulfill the export strategy, major reforms are necessary, ensuring affordable capital for exporters, zero-rating all exports, and providing competitive energy sources across the country.
Additionally, stability in economic policies, addressing industrial concerns, and incentivizing regions equally are crucial for realizing this ambitious export target. Without addressing these factors, the $100 billion export strategy risks remaining an unfulfilled ambition.
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