Exports to European Union (EU) dipped by over 4.41 per cent in FY23 due to a slump in demand for Pakistani goods in Germany and the Netherlands.
The exports to the EU’s 27 member countries amounted to $8.188 billion during FY23 against $8.566bn in the preceding fiscal year, according to data compiled by the State Bank of Pakistan.
Exports posted a paltry growth in terms of euros. However, the decline in export was seen despite the Generalised System of Preferences Plus (GSP+) scheme. The GSP+ scheme became effective on Jan 1, 2014, and it will remain available to Pakistan for the current fiscal year.
The top export destinations for Pakistan are Germany, the Netherlands, Spain, Italy and Belgium.
A product-wise analysis shows large variations. For example, exports of garments and hosiery to the EU increased. The second biggest export category is home textiles and the third category is cotton and intermediary goods of textiles.
Other products exported to the EU included articles of leather, rice, sports goods (footballs), surgical goods, footwear, plastics, minerals, machinery, carpets, cutlery, chemicals and articles of rubber and pharmaceuticals.
Before Brexit, Pakistan’s major export destination was the United Kingdom. In the post-Brexit period, Pakistan’s exports dipped by 10.63pc to $1.966bn in FY23 from $2.20bn in the same period of the previous financial year.
The decline in exports to the UK is a discouraging factor. However, exporters fear they will lose the UK market following Brexit. The British government, however, 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.
In terms of market penetration, the UK is now replaced by Germany under GSP+ and emerged as the top export destination for Pakistani products. Country-wise data shows that export declined by 8.62pc to Germany as it stood at $1.600bn in FY23 from $1.751bn over the previous year.
The second biggest market for Pakistan’s exports is the Netherlands. Exports to that country went down by 3.53pc to $1.446bn in FY23 against $1.499bn the preceding year. Both Germany and the Netherlands have emerged as major export destinations for Pakistani goods under the GSP+ scheme.
The third biggest EU market for Pakistani export goods is Spain. Exports to that country grew 19.39pc to $1.373bn in FY23 as against $1.150bn in the previous year.
The exports to Italy, the fourth biggest market for Pakistani products in the EU, increased by 5.88pc to $1.151bn in FY23 against $1.087bn in FY22.
Exports to Belgium declined by 2.20pc to $700.93m in FY23 against $717.140m in FY22. However, exports to France increased by 7.24pc as export value reached $570.12m against $531.60m over the preceding year.
Exports to Poland dipped by 3.65pc to $345.486m against $358.580m, followed by 29.47pc to Denmark as it declined to $207.961m as against $294.873m in FY22.
The exports to Sweden were down by 18.6pc to $156.481m against $192.404m over the last year, and to Ireland by 7.17pc to $118.06m in FY23 against $127.18m in FY22. However, exports to Greece increased by 15pc to $124.730m against $108.46m in FY22.
Pakistan’s exports to EU decline by 4.41 percent in FY23
