Services trade deficit hits new peak of $6 billion

The country's services trade deficit has widened by 50 percent to hit a new peak of six billion dollars in FY08 due to decline in exports and high import payments of transportation, construction, financial, computers services and royalties.
Statistics revealed on Saturday that overall services sector exports stood at 3.590 billion dollars against the imports of 9.892 billion dollars during FY08, depicting a deficit of 6.302 billion dollars. The deficit in 2008 is some 50 percent higher than FY07, as during this year it stood at 4.170 billion dollars against 6.302 billion dollars in 2008.
The service exports declined by 13 percent to 3.590 billion dollars in 2008 over the exports of 4.14 billion dollars in 2007. While on the other hand imports of service trade have surged by 19 percent to 9.892 billion dollars from 8.31 billion dollars.
Major contribution in services trade deficit was witnessed by transportation services, travel services and royalties, as only transportation sector has contributed around 45 percent share in the overall deficit. Two-sector transportation and travel services' deficit contributed 62 percent in overall deficit and mounted to 3.953 billion dollars in last fiscal year as compared to 3.423 billion dollars in FY07.
"Rising imports played a prominent role in the services sector deficit, while raise in the shipping lines tariff is also another leading factor," economists said. Transportation service exports stood at 1.050 billion dollars against the imports of 3.686 billion dollars. Travel imports amounted to 1.58 billion dollars over the exports of 263 million dollars, while communication sector exports stood at 117 million dollars against the imports of 107 million dollars.
Healthy increase has been witnessed in government service exports, which have contributed around 38 percent of total exports. The government sector shows a surplus income of 945 million dollars, as government services exports have reached 1.374 billion dollars against the imports of 429 million dollars.
In addition, the country has paid some 130 million dollars on account of royalties and licence fee against the earning of 51 million dollars. Month-on-month basis during June 2008, services trade has faced a deficit of 204 million dollars with 663 million dollars exports and some 867 million dollars imports.