Pakistan’s Exports to Europe Decline Despite GSP+ Status in Q1 FY27

ISLAMABAD: Pakistan’s exports to major European markets have declined in the first quarter of the fiscal year 2026-27, despite the country holding the Generalised Scheme of Preferences (GSP+) status. The overall exports to Europe fell by 1.84% to $2.350 billion from $2.394 billion during the same period last year.

Trade data from the State Bank of Pakistan indicates a modest dip in exports, with some regions experiencing slight growth. Exports to northern Europe saw a notable increase of 21.07%, rising to $236.321 million from $195.191 million a year ago. However, the ongoing conflict in the Middle East and the European Union’s preferential market access granted to India, a significant competitor in textiles, have raised concerns among policymakers.

The decline in exports is alarming for the Pakistani economy, as analysts warn that the Middle East conflict may further suppress demand. Rising energy costs are expected to impact consumer spending in Europe, which is already grappling with the economic repercussions of the Ukraine war. This situation poses a significant challenge for Pakistan’s textile sector, which relies heavily on European markets.

Looking ahead, stakeholders are urged to reassess trade strategies and explore new markets to mitigate the impact of these challenges. Policymakers are expected to convene discussions on enhancing trade relations and addressing the competitive landscape in the textile industry.