The urgent SOS call issued by the textile sector, warning of mass layoffs and factory closures, challenges the government’s recent narrative of a successful economic turnaround. The crisis, driven by a sharp decline in export momentum, highlights a widening disconnect between macroeconomic stability indicators and distress in the country’s largest export sector, a business leader said.

Former Islamabad Chamber of Commerce president Shahid Rasheed Butt said the textile and apparel industry, which contributes about 60 percent of national exports, has reached a critical breaking point. November 2025 data showed a 2.7 percent year-on-year fall in exports and an 11.7 percent month-on-month drop, signalling a rapid loss of competitiveness.

He attributed the downturn to policy-driven costs that make production commercially unviable, including regionally high energy tariffs, expensive borrowing due to elevated interest rates, a cascading tax structure, and delayed tax refunds.

According to Shahid Butt, global buyers do not absorb these domestic inefficiencies, resulting in cancelled orders and a permanent shift of business to competing countries.

He said that while tight fiscal and monetary policies may have stabilised the currency and eased inflation somewhat, they are squeezing the productive economy. The sector employs nearly 40 percent of the industrial workforce and warns that without immediate relief on energy prices and credit costs, large-scale job losses are imminent.

Government officials maintain that reforms under the current stabilisation programme are necessary for long-term sustainability. Still, industry representatives argue that recovery claims ring hollow as factories slow production, workers face layoffs, and export earnings weaken, raising concerns for growth, employment, and external accounts.