Exports to Europe fall 8pc despite GSP plus status: PIAF

LAHORE   -  Raising grave concern over the contin­ued falling trend of Pakistan exports the Pakistan Industrial and Traders As­sociations Front (PIAF) said that Paki­stan’s exports to European countries dipped year-on-year by 7.54 percent in the first seven months of the current fiscal year, mainly due to reduced de­mand for Pakistani goods in western, southern and northern Europe.

PIAF Chairman Faheem-ur-Rehaman Saigol, quoting the latest figures, said that this decline in export proceeds indicated the challenges faced by Paki­stani exporters in these economically uncertain times despite having prefer­ential access to 27-member EU coun­tries. The export proceeds from these countries fell to $4.866 billion in July-January FY24, a drop from the $5.263 billion recorded in the corresponding months of the previous year, according to figures compiled by the State Bank of Pakistan. In FY23, exports to the EU dropped 4.41 percent to $8.188 billion from $8.566 billion in the preceding fis­cal year. However, the decline in exports was seen despite the Generalised Sys­tem of Preferences Plus (GSP+) scheme.

The PIAF chairman said that 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 countries such as Ger­many, the Netherlands, France, Italy and Belgium, accounts for the largest portion of Pakistan’s exports to the EU. However, there has been a significant decrease of 13.85 percent in exports to this region. The export value stood at $2.393 billion in the first seven months of FY24, down from $2.778 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. Exports to southern Europe saw a paltry decline of 0.22 percent to $1.743 billion in 7 months of FY24 from $1.747 billion over the corresponding period of last year. In this region, exports to Spain saw a growth of 5.67 percent to $856.423 million in 7 months of FY24 from $810.461 million over the last year. Exports to Italy stood at $649.433 million in 7 months of FY24 against $661.932m over the last year, indicating a decline of 1.88 percent. However, ex­ports to northern Europe have not done well, recording a 7.59 percent decline. The export value to this region stood at $0.365 billion this year, down from $0.395 billion over the corresponding months of the previous year.

PIAF Chairman Faheem-ur-Rehaman Saigol stated that the overall exports during July-February 2023-24 totaled $18.678 billion against $20.57 billion during the corresponding period of last year, showing a decrease of 9.21 percent while the exports in February 2024 were $2.19 billion compared to $2.24 billion of Jan 2023 showing a de­crease of 2.36 percent and by 22.69 per­cent, respectively. The PIAF chairman pointed out that administrative mea­sures, leading to raw material shortage for the industry and resultantly lower production, were the main reason for the plunge while the slowdown in glob­al demand amid monetary tightening was another reason, he said.

Faheem Saigol said that Pakistan has remained a potential market for for­eign investors, who still have plans to make fresh investment in the country, but they have continued to wait for the return of economic stability. He high­lighted uncertainty in the rupee-dollar parity as one of the major concerns of foreign investors. He said a slowdown in the economy had badly impacted business confidence. It is must for the authorities concerned to first create an enabling environment for the local businessmen desiring to make new investment. The PIAF chairman advo­cated the need for raising the country’s tax base so that tax-to-GDP ratio im­proves from current poor level.

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