KARACHI: Pakistan's economic vulnerabilities have been highlighted by a significant contraction in merchandise exports and foreign direct investment, according to Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum. The latest macroeconomic data from the State Bank of Pakistan indicates a 7.3 percent decline in exports and a 33 percent fall in FDI during the first eight months of the fiscal year. Hussain emphasized the urgent need for economic reforms to ensure sustainable recovery and cautioned against complacency despite a current account surplus in February.
According to Pakistan Businessmen and Intellectuals Forum, the State Bank's data shows a current account surplus of $427 million in February 2026, the highest since March 2025. However, the country still experienced a cumulative current account deficit of $700 million from July to February, compared to a surplus of $479 million in the previous fiscal year. Hussain warned that structural weaknesses continue to threaten long-term financial stability.
The decline in export performance, with total merchandise exports falling to $20.46 billion, underscores the challenges faced by local manufacturers due to high production costs and uncompetitive energy tariffs. Conversely, workers' remittances increased by 10.5 percent, reaching $26.5 billion, which helped manage the external account and trade deficit.
Hussain expressed concern over the 33.3 percent decrease in FDI, attributing it to structural bottlenecks and bureaucratic hurdles deterring international investors. While the IT sector showed growth, recent declines in IT receipts due to geopolitical tensions necessitate government intervention.
In conclusion, Hussain urged the government to prioritize sustainable economic growth through measures like reducing business costs and lowering energy tariffs to prevent further economic deterioration amid the ongoing USA-Israel-Iran conflict in the Middle East.
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