Pakistan plans to remove duties on many raw materials used by exporters. The aim is to make them more regionally competitive and help the economy escape a recurring boom-bust cycle. Discounted energy will be supplied to export-based factories. The devaluation and import duty cuts have improved Pakistan’s competitiveness, with exports expected to rise this fiscal year. More than half of Pakistan’s exports are textiles, with the industry now operating near maximum capacity.

Pakistan’s economic growth is seen decelerating to 2.4 per cent in the year through June, its weakest pace in more than a decade. Consumption growth slowed and investment contracted last fiscal year. To contain the damage from soaring deficits, Pakistan has devalued its currency by half over the past two years. Shipments from the South Asian nation have been largely stagnant over the past decade, a time when other developing economies like Vietnam and Bangladesh have seen their export sectors thrive. The European Union, which takes about one-third of Pakistan’s exports, has extended favorable access to its markets for two more years. Pakistan’s exports to Europe grew by 30 per cent in the two years after it received favorable access in 2014, but the pace has slowed since.