Services trade deficit narrowed down by 2 percent, or $13 million, during the first quarter of the current fiscal year, mainly due to higher exports and slowdown in imports. The State Bank of Pakistan (SBP) said that the country's services sector trade was gradually improving and overall imports and deficit were on decline.
Services sector posted a deficit of $705.734 million in July-September of fiscal year 2010-11 as compared to $718.529 million in corresponding period of 2009-10, depicting a decrease of 2 percent or $12.795 million. Exports of services trade mounted by 15.21 percent or $127.45 million to $965.366 million in first three months of current fiscal year against $837.907 million in same period of last fiscal year.
Similarly, imports under services sector registered an increase of 7.36 percent due to high payments on account of transportation, travel services, insurance, technical fee, royalties and government sector. Services sector imports stood at $1.671 billion in July-September of current fiscal year as compared to $1.55 billion in corresponding period of last fiscal year, depicting an increase of $114.664 million.
The major surge was witnessed in the imports of transportation, travel and government services. Only imports of transportation sector posted a deficit of $612 million in first quarter of current fiscal year with $926.384 million imports and $313.670 million exports. In addition, travel sector stood at $102.866 million with $75.441 million exports and $178.307 million imports during the first quarter of current fiscal year.
A surge of 40 percent in the payments on royalties and licence was also witnessed as royalties and licence imports stood at $23.39 in first quarter of current fiscal year as compared to $16.75 million in corresponding period of last fiscal year.
The country earned $78.129 million on account of communication services, $6.37 million in construction, $6.16 million in insurance, some $27.85 million on account of financial services and $45.170 million on account of information technology and $291.5 million government services account during the July-September of fiscal year 2010-11.
On the other hand Communication imports stood at $39.64 million, construction $3.74 million, insurance $42.87 million, financial sector $26.03 million, information technology $31.58 million, and payments on government services stood $153.14 million in first three months of current fiscal year. Meanwhile, month on month basis services deficit in September stood at $196.643 million with $375.181 million exports and $571.824 million imports. It may be mentioned here that during the last fiscal year the country had faced a deficit of $1.677 billion with $6.825 billion imports and $5.148 billion exports.
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