First 10 months of Fiscal Year 2018: services trade deficit surges to $4 billion

The country's services trade posted over $4 billion deficit during the first ten months of this fiscal year (FY18) mainly due to higher import growth. The country has not received single penny on account Coalition Support Fund (CSF) from United State during this fiscal year, of which not only exports posted negative growth but the services account also posted hefty deficit. During the last fiscal year, some $550 million inflows were arrived under the head of logistics support.
According to State Bank of Pakistan (SBP), the country's services sector deficit swelled 27 percent during the first ten months of this fiscal year. Services trade registered $4.216 billion deficit during July-April of FY18 compared to $3.327 billion in same period of FY17, showing an increase of $889 million.
Month on Month basis, during April 2018, services trade registered a $364 million deficit with $451 million exports and $815 million imports.
The detail analysis revealed that during the period under review services sector exports declined by 9 percent, while imports were surged by 6 percent. Pakistan's services sector exports fell $385 million to $4.7 billion in July-April of FY18 compared to $4.31 billion in corresponding period of last fiscal year. The major decline in exports has also arrived from the government services as CSF inflows not matured. During the period under review, exports of the government services stood at $1.041 billion down from $1.615 billion.
Similarly, services sector imports surged to $8.53 billion in first ten months of this fiscal year as against $8.02 billion in corresponding period of last fiscal year, showing an increase of $504 million.
During the period under review, the country earned $791 million on account of transportation services up from $760 million. In addition, some $311 million from travel, $58 million on account of construction, $84 million through financial services, $38 million from insurance sector and some $906 million on account of telecommunication services.
Meanwhile, transportation payments (imports) stood at $3.285 billion, travel $1.717 billion, telecommunication $405 million, financial sector $134 million, insurance $183 million, charges for use of intellectual propriety were $200 million and an amount of $521 million was paid as government services.