Pakistan’s exports to main markets increase over 13pc

ISLAMABAD: Pakistan has seen double-digit growth in exports to China, Germany, Netherlands and Poland during the last fiscal year of 2020/21 despite COVID challenges, according to commerce ministry.

Exports to China grew more than 13 percent to $2.3 billion during the last fiscal year of 2020/21 from $1.7 billion in the previous fiscal year. Exports to Germany grew 19 percent to $1.5 billion over previous $1.3 billion. Exports to the Netherlands increased 23 percent to $1.2 billion compared to the previous $1 billion. Exports to Poland increased 28 percent to $308 million.

“Exports have done quite well in our major markets. Exporters have accomplished this despite the problems created by the COVID-19 pandemic and they deserve credit for it,” Commerce Adviser Razak Dawood wrote on Twitter. He also commended trade and investment officers for their efforts and urged urge them to further increase facilitation to exporters.

Last year, lockdowns related to COVID-19 caused economic slowdown in addition to build pressure on fiscal balance of countries due to health-related costs. For some economies, like Pakistan, supply chain disruption created business opportunities with diversion of export orders from regional peers that were relatively hit hard.

Exports to the UK increased 33 percent to $2.025 billion during the last fiscal year compared to $1.526 billion in the preceding fiscal year, an increase of $499 million.

The U.S. and European Union are still the major markets for Pakistan. Alone in July-May, exports to the United States of America increased to $4.5 billion from $3.6 billion. Comparatively, exports to China rose $1.8 billion in July-May compared to $1.5 billion in the same period a year earlier. Exports to Germany increased to $1.4 billion from $1.2 billion.

While the growth in Pakistan’s exports to China outpaced Pakistan’s exports to the rest of the world, Pakistan’s imports from China grew even more, according to Pakistan Business Council (PBC).

Poorly-negotiated free trade agreement in 2007 led to widening trade deficit, according to analysts. Neither the country could get access for its products better placed to export to China and imports from the world’s second largest economy that contributed to premature de-industrialisation in Pakistan.

The second phase of the China Pakistan free trade agreement (CPFTA) spanning 2019-2024 entered its implementation phase from January 1, 2020.

“Negotiated well, CPFTA-2 should significantly improve Pakistani exporters’ access to the $2 trillion Chinese import market and thus help address the country’s ballooning trade deficit,” said PBC.