ISLAMABAD: Pakistan’s trade landscape witnessed a notable shift in the outgoing fiscal year FY23, with the country’s exports to nine regional countries registering a significant decline of 21.10%.
According to available latest data this drop, primarily attributed to reduced shipments to China.
The repercussions of this trade decline extend beyond exports alone, as imports from China, a crucial trading partner, also experienced a noteworthy decrease throughout FY23.
As part of its commitment to austerity, the State Bank of Pakistan accorded lower priority to import container clearance and the issuance of letters of credit for consumer goods during the fiscal year.
During July-June FY23, Pakistan’s exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives amounted to $3.331 billion, comprising just 12% of the country’s total exports valued at $27.73 billion.
China remains at the helm of Pakistan’s regional exports, surpassing other densely populated nations such as India and Bangladesh. However, Pakistan’s exports to China experienced negative growth during the initial fiscal year of FY23, a departure from past trends. China accounts for the lion’s share of regional exports, constituting 60%, while the remaining portion is distributed among eight other countries.
Exports to China have witnessed a decline of 27.3%, sliding to $2.02 billion in FY23 from $2.78 billion in FY22. This contraction marks the first instance of a decrease in export proceeds in the post-Covid period. Simultaneously, imports from China have faced a substantial reduction of 44.1%, dwindling from $17.30 billion to $9.66 billion on a year-on-year basis.
Exports to Afghanistan have similarly experienced negative growth, diminishing by 9.97% to $521.99 million in FY23 compared to $552.78 million in FY22. It is worth noting that Afghanistan was once the second-largest export destination for Pakistan, following the United States. However, the reported export figures do not encompass proceeds from land routes.
Exports to Iran remained modest at $0.028 million in FY23, primarily due to informal trade channels in the border areas of Balochistan. Barter trade continues to play a significant role in Pakistan’s trade interactions with Iran.
The export trajectory with India portrays a notable decline of 74.53%, plummeting from $1.292 million in FY22 to $0.329 million in FY23. Similarly, exports to Bangladesh witnessed a decrease of 11.92%, amounting to $768.54 million from $872.56 million in FY22. Exports to Sri Lanka exhibited a dip of 24.4%, settling at $283.77 million, down from $375.37 million the previous year.
Meanwhile, Pakistan’s exports to Nepal faced a substantial decrease of 58.7%, declining from $5.77 million in FY22 to $2.84 million in FY23. In contrast, exports to the Maldives demonstrated growth of 23.5%, surging from $6.91 million to $8.54 million. Bhutan recorded marginal exports worth $0.048 million in FY23, marking a decline of 41.46% from the $0.082 million exports in the previous year.
The decline in exports to regional markets underscores the intricate nature of global trade dynamics and underscores the need for strategic policy measures to navigate through such fluctuations. It also highlights the challenges posed by economic uncertainties and geopolitical developments in various trading partner countries.
