40 percent rise in services trade deficit

Services trade deficit widened by 40 percent to new high level of $4.224 billion during the eight months of the current fiscal year, breaching all previous records. This was mainly due to higher payments on transportation, travels, financial, computers services and royalties.
According to State Bank statistics on Wednesday, Pakistan received $2.123 billion on account of services export against payments of $6.347 billion on the account of services imports during the July-February period of current fiscal year, depicting a deficit of $4.224 billion.
This year''s services sector deficit is higher than last fiscal year''s, which stood at $4.125 billion. The deficit is also widened by 40 percent over the same period of last fiscal year, as during July-February 2007 the country faced a deficit of $3 billion with $5.54 billion exports and $2.53 billion imports. Services sector exports during the period declined by 16 percent, while imports went up by 14 percent.
Major contribution in services trade deficit witnessed by transportation services, travel services, and royalties, as only transportation sector contributed around 50 percent share in services sector deficit. However, services sector trade deficit during February depicted a decline of 32 percent over February 2007. During February 2008 deficit stood at 256.809 million dollars as compared to 375.054 millions dollar of February 2007.
The services sector exports February this fiscal year stood at 508 million dollars over the exports of 254 million dollars in February 2007. Big deficit has faced in transportation sector, whose exports stood at 729.620 million dollars against imports of 2.333 billion dollars, depicting a deficit of 1.60 billion dollars in eight months.
Travel was the second sector which registered about $1 billion deficit, as travel exports stood at 177.994 million dollars against imports of 1.049 billion dollars, showing a deficit of 871 million dollars. Insurance service exports stood at 22.5 million dollars against imports of 111 million dollars. Financial services payments stood at 110 million dollars against receipts of 29 million dollars.
The country earned 35.23 million dollars on the account of royalties and licences fee against payments of some 84 million dollars. It may be mentioned here that during the last fiscal year country had faced a deficit of 4.125 billion dollars in service trade with exports of $4.125 billion and imports of $8.250 billion.