ISLAMABAD: Despite having Generalised Scheme of Preferences (GSP+) status, Pakistan’s exports to major western and eastern European markets fell in the first quarter of 2026-27 compared with the previous year.

Overall exports to Europe dipped modestly, with a slight increase in proceeds from southern and northern European countries during the July-September quarter, raising serious concerns for policymakers.

The ongoing Middle East conflict has accelerated the decline in exports to these markets, along with the European Union’s preferential market access offered to India, one of Pakistan’s key competitors in textiles.

Data compiled by the State Bank of Pakistan showed that exports to European countries contracted 1.84pc to $2.350 billion in 1QFY27 from $2.394bn a year ago.

Trade analysts warn that the Middle East conflict could further dampen export demand, as rising energy costs are likely to squeeze consumer spending in Europe, which is already under strain from the economic fallout of the Ukraine war.

Exports to northern Europe increased by 21.07pc to $236.321m in 1QFY27 from $195.191m a year ago.

Exports to southern Europe grew 5.26pc to $879.896m in 1QFY27 from $835.862m in the corresponding period last year. In this region, exports to Spain rose 17.78pc to $451.244m from $383.122m in the preceding year.

Exports to Italy declined 8.49pc to $298.731m in 1QFY27, compared with $326.460m in the same period last year. Exports to Greece grew 3.52pc to $34.961m during the months under review, compared with $33.774m over the previous year.

However, exports to eastern Europe fell 15.05pc to $168.761m in 1QFY27 from $198.677m.

Before Brexit, the United Kingdom was Pakistan’s major export destination. In the post-Brexit period, Pakistan’s exports to the UK increased 6.64pc to $612.305m in 1QFY27 from $574.171m a year ago.

Western Europe, which includes countries such as Germany, the Netherlands, France, Italy, and Belgium, accounts for the largest share of Pakistan’s exports to the EU. However, exports to this region shrank 8.51pc to $1.065bn in 1QFY27 from $1.164bn in 1QFY26.

Exports to Germany dipped 12.77pc to $389.116m in 1QFY27 from $446.100m. Similarly, exports to the Netherlands, the second-largest market for Pakistani goods, fell by 3.07pc to $370.005m from $381.752m a year ago.

Exports to France fell by 0.47pc to $136.030m in 1QFY27 from $136.686m, followed by a 7.57pc decline to Belgium’s $127.431m against $137.871m.

Published in Dawn, November 5th, 2026