Tanveer voices concern over high trade deficit

SM Tanveer, the FPCCI leader and Patron-in-Chief of the United Business Group (UBG), has expressed deep concern over the surge in Pakistan's trade deficit, which hit a four-year high of $39.5 billion in fiscal year 2025-26.

Reacting to the data showing a 22% year-on-year increase in trade gap, Tanveer stated that the numbers serve as a wake-up call for policymakers. The massive gap, driven by an 8% expansion in imports alongside a 6% decline in exports, exposes deeper structural flaws that continue to suppress Pakistan's industrial competitiveness on the global stage.

"We cannot achieve true economic sovereignty on borrowed capital or remittances alone," he emphasised. "The economy can only flourish through aggressive export-led growth and the robust revival of domestic commerce. The current trend is unsustainable for our national reserves and the survival of our industrial base."

To counter this contraction and turn the tide for Pakistani exports in FY27, the UBG patron-in-chief outlined a multi-pronged strategy focusing on cost-of-doing-business reduction and structural incentives.

He said high energy costs have rendered Pakistani products, particularly textiles and light engineering, too expensive compared to regional peers like Bangladesh, India and Vietnam. The government must immediately apply a dedicated, regionally competitive power tariff for the export sector. Tanveer said access to affordable electricity is an absolute necessity to run factories at maximum capacity and keep pricing attractive in global markets. Furthermore, exorbitant interest rates have completely stalled private-sector credit growth. Industrialists cannot afford to borrow for working capital, let alone long-term expansion or modernisation. Therefore, the State Bank must aggressively lower the policy rate.