Exports to Europe shrink

ISLAMABAD: Pakistan’s exports to European countries shrank 3.57 per cent in the first 11 months of FY24 despite its GSP+ status, which grants duty-free entrance for most goods into European markets, showed data released by the State Bank of Pakistan on Monday.

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 European exports.

In absolute terms, Pakistan’s exports to the EU dipped to $7.737bn in 11MFY24 from $8.024bn in the corresponding months of the preceding year. The decline was mainly due to reduced demand for Pakistani goods in western, southern, and northern Europe.

In FY23, exports to the EU dropped 4.41pc to $8.188bn from $8.566bn in the preceding fiscal year. Western Europe, which includes countries such as Germany, the Netherlands, France, Italy and Belgium, accounts for the largest portion of Pakistan’s exports to the EU.

However, exports to this region have significantly decreased by 8.66pc. The export value stood at $3.826bn in the first 11 months of FY24, down from $4.189bn during the same period last year.

While exports to western Europe declined and recorded a paltry growth to southern and northern Europe, there is a silver lining in the form of an uptick in exports to eastern Europe. The exports saw an increase of 11.58pc to $577.38m in 11MFY24, up from $517.45m in the corresponding months last year.

Exports to southern Europe saw a paltry growth of 0.25pc to $2.750bn in 11MFY24 from $2.743bn in the corresponding period last year. In this region, exports to Spain grew 4.87pc to $1.333bn in 11MFY24 from $1.271bn last year.

Exports to Italy declined 1.90pc to $1.032bn in 11MFY24, compared to $1.052bn in the same period last year.

However, exports to northern Europe witnessed a meagre growth of 1.54pc. The export value to this region stood at $584.38m, up from $575.52m 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 $1.861bn in 11MFY24 from $1.808bn over the corresponding period last year, indicating an increase of 2.93pc.

Published in Dawn, July 9th, 2024