Farooq Awan

Pakistan’s export sector is expected to post a strong performance in fiscal year 2025-26, with total shipments projected to climb to $40 billion, supported by sustained growth in traditional textile products and rising contributions from information technology and other value-added sectors.

According to the Pakistan Macroeconomic Outlook FY2026 prepared by the Research and Publications Department of the Institute of Cost and Management Accountants of Pakistan (ICMA), exports are forecast to increase by 25 percent compared to FY25, when outward shipments totaled $32.0 billion. The projected rise represents one of the most notable year-on-year improvements in recent years and signals strengthening external demand for Pakistani goods and services.

The export uptrend builds on steady progress observed last year. In FY25, shipments rose from $30.7 billion in FY24 to $32.0 billion, reflecting gradual recovery in global markets and improved domestic production capacity. The continuation of this growth into FY26 suggests that key sectors are gaining resilience despite ongoing international economic uncertainties.

Early indicators for the current fiscal year reinforce this outlook. During the first five months of FY26, from July to November, exports reached $16.6 billion. This compares favourably with the same period last year and points to sustained momentum across major exporting industries. The steady performance during the opening months strengthens expectations that the full-year target is achievable.

ICMA notes that textiles remain the backbone of Pakistan’s export structure, accounting for a significant share of foreign exchange earnings. Consistent demand for garments, yarn, and value-added textile products has helped anchor overall export performance. At the same time, the technology sector is emerging as an increasingly important contributor, with IT exports registering record monthly levels in early FY26.

The rise of IT and services exports is viewed as a positive structural development. Unlike traditional commodity-based shipments, digital services offer higher margins and are less dependent on physical logistics, enabling faster scaling and greater global market reach. This diversification helps broaden the country’s export base and reduces reliance on a limited set of products.

The report indicates that supportive economic policies and improved sectoral performance are contributing to the upward trajectory. Enhanced facilitation measures, stronger industrial output, and better integration of services exports are enabling firms to tap into new markets while expanding existing ones.

Higher export earnings carry broader economic significance. Increased foreign exchange inflows help strengthen the external position, support currency stability, and provide resources for financing essential imports and development needs. A sustained export expansion can also stimulate domestic production, create employment opportunities, and encourage investment in competitive industries.

ICMA’s projection of $40 billion for FY26 therefore reflects not only quantitative growth but also qualitative improvement in the composition of exports. The combination of established textile strength and expanding technology services suggests a more balanced and dynamic export profile.

If current trends continue through the remaining months of the fiscal year, Pakistan is on track for one of its strongest export performances yet, reinforcing the role of external trade in driving economic activity.

Credit: INP-WealthPk