Pakistan’s exports to Europe have experienced a massive surge, as it has hit $3.8 billion in the first five months of the current fiscal year, marking an 8.62% increase compared to the same period last year. This boost in exports is depicted from the growing economic relationship between Pakistan and Europe, with the European Union (EU) being Pakistan’s second most crucial trading partner.
The EU contributes more than 14 percent of Pakistan’s total trade and absorbs a substantial 28% of the country’s total exports, with textiles and clothing considered to be the most dominant products in this trade. One of the major factors contributing to this increase is Pakistan’s incessant access to the Generalized Scheme of Preferences, a special trade arrangement granted by the EU to developing countries.
This scheme allows Pakistan to benefit from tariff reductions in exchange for commitments to uphold 27 international conventions related to human rights, environmental protection, and good governance. The current GSP framework, which expired in December 2023, was extended by the EU Parliament for another four years, securing Pakistan’s favorable trade status.
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The Special Investment Facilitation Council (SIFC), a hybrid civil-military body formed in June 2023, has also played an important role in improving the growth rate. The SIFC’s role is to on promote business opportunities and attract foreign investment in various sectors, including:
- Textiles
- Leather garments
- Sports goods
- Surgical instruments
The council’s main aim is to change the economy’s trajectory of Pakistan, to tackle the challenges faced by the country, a rapidly depreciating currency, and a decline of foreign reserves. The government, led by the minister of finance Muhammad Aurangzeb, is leaving no stone unturned to shift the economy to export oriented.
This kind of transition is considered to be highly effective for sustainable economic growth in the long term. As part of this strategy, Pakistan has been actively pursuing economic and trade deals with Gulf countries such as Saudi Arabia and the Dubai, as well as fostering bilateral cooperation with Central Asian states, Russia, and others. This concerted effort reflects Pakistan’s zeal and determination to make its economy a Stronger and resilient one.