A notable decrease of 14.55 percent in exports to nine neighboring nations was recorded during the initial month of the present fiscal year, primarily attributed to a reduction in shipments to China, according to the data compiled by the State Bank of Pakistan.
In July, Pakistan’s exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan, and the Maldives plummeted to $260.983 million. This figure represents only 12.62 percent of the country’s total exports, which amounted to $2.068 billion for the same month.
The export decline is not isolated to Pakistan, as imports from China also experienced a substantial decrease compared to the previous year. In the fiscal year 2023, exports to regional countries observed a worrying 21.1 percent drop, reaching a total of $3.331 billion on a year-on-year basis.
Pak-China trade decline
China stands as the primary trade partner within the region, accounting for 60 percent of Pakistan’s regional exports. However, even this key partnership faced challenges, with exports to China declining by 15.32 percent in July, falling to $147.385 million from $174.056 million in the corresponding month of the previous year. The fiscal year 2023 recorded a more significant decline of 27.3 percent in exports to China, with figures dropping from $2.78 billion in FY22 to $2.02 billion.
Export decline with other countries
In contrast, exports to India dropped by a substantial 48.9 percent to $0.024 million in July, down from $0.047 million in the same month of the previous year. Exports to Bangladesh also declined by 28.69 percent, reaching $50.731 million from $71.147 million in July 2022, while exports to Sri Lanka experienced a dip of 27.29 percent, totaling $20.463 million compared to $28.146 million in the same period last year.
Furthermore, exports to Nepal witnessed a year-on-year decrease of 26.59 percent, amounting to $0.207 million in July. Notably, no exports were recorded to Bhutan in July, emphasizing the challenges in diversifying Pakistan’s regional trade portfolio.
Remarkable increase in Pak-Afghan trade
A notable exception to this downward trend was Pakistan’s exports to Afghanistan, which posted a remarkable growth of 32.79 percent, reaching $42.173 million in July, compared to $31.757 million in the same period last year. Afghanistan, which was once Pakistan’s second-largest export destination after the United States, showed resilience despite ongoing challenges.
Shipments to the Maldives also showed a promising 18.51 percent increase, rising to $0.544 million from $0.459 million.
It’s important to note that the export figures do not include proceeds from land routes. Meanwhile, exports to Iran, which mainly occur through informal channels in the border areas of Balochistan, saw no official activity in July. Trade with Iran often involves barter arrangements.