Pakistan exports to European Union states fall

Pakistan’s exports to European countries have fallen in the current fiscal year despite a GSP+ status that allows duty-free entrance into European markets for the majority of its products.

In absolute terms, Pakistan’s exports to European countries dipped 6.89%YoY in the first eight months of the current fiscal year to US$5.411 billion from US$5.812 billion in the corresponding period last year.

The decline was mainly attributed to reduced demand for Pakistani goods in western, southern and northern Europe.

In FY23, exports to the EU had dropped 4.4% to US$8.188 billion from US$8.566 billion a year ago.

In October 2023, the European Parliament unanimously voted to extend the GSP+ status for another four years until 2027 for developing countries, including Pakistan, to enjoy duty-free or minimum duty on exports to the European market.

Western Europe, which includes Germany, the Netherlands, France, Italy and Belgium, accounts for the largest portion of Pakistan’s exports to the EU.

There has been a significant decrease of 13.2% in exports to this region. The export value was reported at US$2.609 billion in the first eight months of FY24, down from US$3.006 billion during the same period last year.

While exports to western, southern and northern Europe have seen a decline, there is a silver lining in the form of an uptick in exports to Eastern Europe. The exports saw an increase of 8.2% to US$407.6 million in 8MFY24 against US$376.68 m over the corresponding months of last year.

Exports to southern Europe saw a paltry decline of 1.1% to US$1.971 billion in 8MFY24 from US$1.993 billion over the corresponding period of last year. Exports to Spain grew 4.66% to US$966.95 million in 8MFY24 from US$923.85 million a year ago.

Exports to Italy declined 3.36% to US$733.79 million from US$759.36 million.

Exports to northern Europe have not done well, recording a 3.04% dip. The export to this region was reported at US$423.732 million, down from US$437.03 million in the corresponding period last year.

Before Brexit, Pakistan’s major export destination was the United Kingdom. In the post-Brexit period, Pakistan’s exports to the UK slightly went up to US$1.351 billion in 8MFY24 from US$1.329 billion.

In FY23, Pakistan’s exports had dipped by 10.63% to US$1.966 billion to the UK from US$2.20 billion a year ago.

The British government has assured Islamabad of no change in the post-Brexit scenario which is evident from the inclusion of Pakistan in its preferential market access scheme.