Pakistan’s exports to Europe decline by 12% in Q1 of FY24 despite GSP+

Export revenue falls to $1.929 billion from $2.212 billion in July-September FY23

Despite preferential access to 27-member European (EU) countries, Pakistan’s exports to Europe in the first quarter (July-September) of the current fiscal year 2023-24 experienced a 12.13 percent decline compared to the same period of last fiscal year.

The reduced demand for Pakistani goods in Western and Northern Europe contributed to this decline, with export revenue falling to $1.929 billion from $2.212 billion in July-September FY23, as reported by the State Bank of Pakistan.

In the previous fiscal year 2022-23, exports to EU nations declined by 4.41 percent to $8.188 billion from $8.566 billion, even with the Generalised System of Preferences Plus (GSP+) scheme in effect.

The GSP+ status was extended until 2027 for developing countries, including Pakistan, allowing duty-free or minimum duty on exports to the European market.

However, Western Europe, encompassing countries like Germany, the Netherlands, France, Italy, and Belgium, saw a significant 28.36 percent decrease in exports, totaling $1.001 billion in Q1 FY24 compared to $1.257 billion in the same period last year.

While exports to western and northern Europe declined, there is a modest increase in exports to southern Europe. Specifically, exports to Spain and Italy rose by 1.62 percent, reaching $773 million in 3MFY24 from $761.32 million in the corresponding months last year.

In contrast, exports to northern Europe recorded a 22 percent decline, with the export value dropping to $150.607 million this year from $194.192 million over the corresponding months of the previous year.

Post-Brexit, Pakistan’s major export destination, the United Kingdom, saw a slight dip of 0.22 percent in Q1 FY24, amounting to $518.803 million from $519.948 million in the same period last year.

The decline continued from FY23, where Pakistan’s exports to the UK dropped by 10.63 percent to $1.966 billion from $2.20 billion in the preceding year.

Under the GSP+, Germany replaced the UK as the top export destination for Pakistani products. However, exports to Germany declined by 20 percent, standing at $364.446 million in Q1 FY24 from $456.895 million over the previous year.

The Netherlands, the second-largest market for Pakistan’s exports, also experienced a decline of 13.18 percent, reaching $331.860 million in Q1 FY24 compared to $382.241 million in the preceding year. Both Germany and the Netherlands have emerged as major export destinations for Pakistani goods under the GSP+ scheme.

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