Sustaining Trade and the Balance of Payments Table 15.4: Extent of Export-led Growth (at constant prices) Annual Rate of Growth Exports* (%) Share in GDP of Exports** (%) GDP Growth Rate (%) 2000-01 to 2005-06 10.3 14.8 5.7 2005-06 to 2010-11 2.1 18.6 2.8 2010-11 to 2015-16-2.6 13.6 4.5 2015-16 to 2021-22 6.7 8.7 4.0 2000-01 to 2021-22 4.0 13.6 4.1 *Volume of Exports Goods and Services|**In the first year of the period Contribution of Exports GDP Growth Rate*** (%) 48.5 24.7 -13.9 26.1 23.8 Source: SBP, PES Table 15.5 highlights the fact that export performance has been linked to the buoyancy in world trade. Table 15.5: Growth Rate of World Trade and of Pakistan’s Exports World Trade [2] Pakistan’s Exports [2] 2001 to 2005 13.2 13.3 2005 to 2010 7.5 6.6 2010 to 2015 1.7 1.1 2015 to 2020 1.3-0.7 2020 to 2021 26.6 32.5 Source: World Bank, WDI. (%) Ratio [2]/[1] 1.008 0.853 0.647 -0.538 1.221 However, while Pakistan’s exports kept pace with growth in world trade from 2000 to 2005, they have since fallen behind. The year, 2021, saw exceptional growth in exports due to the recovery process after COVID-19. The falling profitability of exports has been compounded further by the policy of maintaining an overvalued exchange rate through interventions in the exchange market. The real effective exchange rate was raised by as much as 15 percent from 2010-11 to 2015-16 as shown in Table 15.6. The motivation was to reduce the component of imported inflation, but it led to a fall in the volume of exports by 10 percent and Pakistan saw a big increase in the current account deficit. 145