The country's services sector trade continues to deteriorate and witnessed a deficit of $2.6 billion, up by 67 percent, during the first eleven months of current fiscal year as compared to the same period of last fiscal year. The State Bank of Pakistan revealed on Tuesday that like other economic indicators, the performance of services sector trade is also getting worsen as its exports are on decline and imports are gradually increasing.
According to SBP, services trade deficit, which was on decline during the last fiscal year, has posted a phenomenal surge of 67 percent during July-May of fiscal year 2011-12 (FY12) followed by high import payment on account of travel of other sectors. Services sector trade deficit has mounted to $2.618 billion during first eleven months of current fiscal year compared with a deficit of $1.565 billion in corresponding period of last fiscal year 2010-2011 (FY11), depicting an increase of $1.053 billion.
The detail analysis revealed that exports of services sector have registered a decline of 15 percent or $803 million during the under period review. Services sector exports stood at $4.525 billion in July-May of current fiscal year as against $5.328 billion in same period of last fiscal year.
On the other side services sector imports, which need to curtail, have registered a growth of 4 percent during the period under review and overall imports of services sector reached $7.142 billion during first eleven months of FY12 as against imports of $6.893 billion in corresponding period of fiscal year 2011.
On export side, a massive fall has witnessed in government services income, which has decline by 33 percent. Income under government services fall to $1.511 billion in July-May of FY12 compared with $2.241 billion in corresponding period of last fiscal year, depicting a decline of $730 million.
The country has earned $1.279 billion on account of transportation services, $300 million from travel, $173 million from communication, $22 million from construction services, $207 million from Information Technology (IT), $46 million through financial services and an amount of $74 million have been earned on account of insurance during July-April of fiscal year 2011-2012.
Communication and financial business are two other sectors, which export is continues to fall. Exports of communication sector has decline to $191 million from $207 million and financial sector export stood at $48 million, down from $67 million. Economists said that high payments on account of government service, transportation, travel and information technology are responsible for rising services trade deficit.
Import payments of transportation stood at $3.16 billion, travel $1.23 billion, communication $151 million, construction $53 million, insurance $221 million, financial sector $100 million and IT sector payments $150 million during the period under review.
In addition, some $121 million was paid on account of royalties and $121 million were paid for government services. Month on month basis, services trade deficit in May 2012 stood at $352 million with $339 million exports and $691 million imports as compared to deficit of $340 million with $411 million exports and $751 million imports in May 2011.
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