Pakistan’s export sector is lagging far behind its true potential, with the World Bank revealing that the country is missing out on a staggering $60 billion in possible export earnings.

The latest World Bank report calls for urgent reforms to strengthen trade competitiveness and revive economic growth.

According to the report, the share of exports in Pakistan’s GDP has sharply fallen from 16 percent to just 10 percent over recent years. Experts attribute this decline to rigid business regulations, inflexible exchange rates, and high energy and logistics costs, which make Pakistani products less competitive in global markets.

The World Bank emphasizes that Pakistan’s export sector has significant untapped capacity, but structural barriers are holding progress back. Currently, over 200 government institutions influence private sector operations, creating bureaucratic hurdles and inefficiencies. The report also flags restrictions on remittance of investors’ profits abroad, discouraging foreign businesses from expanding locally.

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High electricity tariffs, outdated digital infrastructure, and weak logistics systems are further inflating production costs, putting Pakistan at a disadvantage compared to regional competitors. “High tariffs, red tape, and government intervention continue to limit export growth,” the report states.

Key reforms recommended 

To reverse the declining export trend, the World Bank recommends several key measures. A flexible exchange rate system could make Pakistani goods more competitive internationally. Simplifying business laws and regulatory frameworks is essential to help exporters expand without unnecessary hurdles.

The report also highlights the role of the Exim Bank of Pakistan. By providing modern export financing mechanisms, the bank could support local businesses in accessing global markets more efficiently. Additionally, the modernization of the Federal Board of Revenue (FBR) and upgrades to the customs system are urged to ensure smoother trade operations.

The World Bank encourages Pakistan to explore non-traditional markets, particularly in Africa and Latin America, where export opportunities remain largely untapped. Expanding into these regions could be a game-changer for Pakistan’s economy and help narrow the $60 billion export gap.