Exports to Europe fall despite GSP+
ISLAMABAD: Pakistan’s exports to European countries declined 6.27 per cent in the first nine months of the current fiscal year.
Exports to the European Union states have begun to dip in the current fiscal year despite a GSP+ status that allows most Pakistani goods a duty-free entrance into European markets.
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 Europe.
In absolute terms, Pakistan’s exports to the EU dipped to $6.105bn in 9MFY24 from $6.27bn in the corresponding months of last year. According to figures compiled by the State Bank of Pakistan, 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 12pc. The export value stood at $2.947bn in the first nine months of FY24, down from $3.353bn during the same period last year.
While exports to western, southern, and northern Europe have declined, there is a silver lining in the form of an uptick in exports to Eastern Europe. The exports saw an increase of 8.38pc to $466.19m in 9MFY24, up from $430.14m in the corresponding months last year.
Exports to southern Europe declined 1.24pc to $2.216bn in 9MFY24 from $2.244bn in the corresponding period last year.
In this region, exports to Spain grew 3.73pc to $1.084 in 9MFY24 from $1.045bn last year.
Exports to Italy declined 3.22pc to $825.44m in 9MFY24, compared to $852.93 m in the same period last year.
However, exports to northern Europe witnessed a 2.31pc dip. The export value to this region stood at $475.92m, down from $487.19m 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 $1.529bn in 9MFY24 from $1.494bn over the corresponding period of last year, indicating an increase of 2.34pc.
In FY23, Pakistan’s exports dipped by 10.63pc to $1.966bn to the UK from $2.20bn in the same period of the preceding year.
The British government, however, has assured Islamabad that there will be no change in the post-Brexit scenario, as evident from Pakistan’s inclusion in its preferential market access scheme.
Published in Dawn, May 12th, 2024