ISLAMABAD: Pakistan’s exports to European markets have slowed down during the first nine months of the current fiscal year, raising fresh concerns about the country’s export performance, even though Pakistan enjoys GSP+ status under the European Union.
According to State Bank of Pakistan data, exports to European countries during July-March 2025-26 increased by 0.94 percent to $6.86 billion, compared to $6.79 billion in the same period last year. However, experts say that this slight increase indicates an overall slowdown, especially due to reduced demand in Western and Northern Europe.
Western Europe, which accounts for the largest share of Pakistan’s exports, recorded a decline of 3.14 percent. Exports to key countries like Germany, the Netherlands, France and Belgium saw a decline, which impacted the overall performance. Northern Europe also recorded a slight decline.
In contrast, exports to Southern and Eastern Europe saw some increase. Demand improved in countries such as Spain and Italy, which partially supported the overall figure.
According to analysts, changes in the global trade environment are a major reason for this trend. The ongoing tensions in the Middle East, especially the conflict between the United States and Iran, are affecting global supply chains, which in turn is affecting access to European markets.
Moreover, the preferential access granted by the European Union to India has made competition even tougher, especially in the textile sector, where Pakistan has a significant share. Along with this, the strict conditions imposed by the EU regarding GSP+ status may also become a challenge in the future.
Exporters are facing issues such as rising production costs, rising energy prices and weak global demand. Experts say that the ongoing economic pressures in Europe, especially the effects of the Ukraine war and rising energy prices, are affecting consumer purchasing power, which is reducing demand for imports.
The UK, which was Pakistan’s major market before Brexit, also saw a slight decline in exports, indicating that Pakistani products are facing challenges in various markets. Experts say the government will have to adopt a new strategy to promote exports, which may include market diversification, cost reduction and a focus on value-added products, to maintain Pakistan’s position in European markets.
