Exports of Pakistan’s textile sector witnessed a significant decline of 22.6%, clocking in at $1.26 billion in March 2023 compared to $1.63 billion recorded in the same month of the previous year, showed latest data released by the Pakistan Bureau of Statistics (PBS).

Data showed textile exports in the first nine months of FY23 decreased by 12.4% to $12.48 billion, declining from $14.24 billion a year earlier.

The decrease in the key textile exports is concerning for the South Asian economy, which is dealing with low foreign exchange reserves.

Forex reserves held by the State Bank of Pakistan (SBP) are currently at $4.04 billion, barely enough for a month of essential imports.

Textile exports may fall by $3bn this year, warns APTMA

On a month-on-month basis, textile exports registered an increase of 6.6%, as compared to $1.18 billion recorded in February.

“Increase is indicative of an MoM recovery in global textile demand. Textile manufacturers of Pakistan have seen improved orders from Europe and USA for value-added segment,” said Nasheed Malik, an analyst at Topline Securities in a report on Tuesday.

The brokerage house said that a drop in demand from major export markets and recent hike in tariffs are key challenges going forward. “However, order clarity exists till Jun-2023 and tariff hikes are currently at a previous stay position till the end of FY23 as per our channel checks,” it said.

“We expect textile exports to clock in at a range of $16-17 billion in FY23 as compared to APTMA’s targets of $25 billion and last year’s FY22 textile exports of $19 billion,” it added.

Meanwhile, Pakistan’s exports during July-March (2022-23) were recorded at $21.046 billion against the exports of $23.350 billion in July-March of 2021-22, showing a decline of nearly 10%, according to the trade data released by PBS earlier this month.