The country's services sector's exports crossed dollar two billion mark during the first four months of the current fiscal year (FY15) in the wake of rising inflows from the Coalition Support Fund (CSF). Pakistan has received some $735 million on account of CSF from the US in July-October FY15 compared to $322m in the same period of FY14, depicting an increase of 128 per cent. The higher inflows from CSF have pushed the exports of services sector above $2 billion level during the period under review.
Analysts said that with massive growth in exports, service sector trade was presenting an improved picture and would support to curb the rising current account deficit, which is continuously on surge and reached $1.759bn mark by the end of October.
However, they said, Pakistan needed to promote exports of other sectors for long-term growth in the export as the CSF inflows were not a permanent tool for exports. "Although services exports witnessed an increasing trend on back of higher inflows of CSF, we believed that it is not sustainable and may decline in future, if arrival of CSF inflows stopped," they added.
According to State Bank of Pakistan (SBP) services sector exports registered a 26pc growth to reach $2.091bn mark in first four months of the current fiscal year against $1.662bn in corresponding period of last fiscal year.
Similarly, imports of services sector also witnessed upward trend and increased by 7pc during the period under review. Services sector imports surged to $2.799bn mark in July-October FY15 compared to $2.598bn in the same period of FY14, showing an increase of $181m.
Following the massive increase in exports, overall trade deficit of services sector also posted a 26pc decline. Services trade deficit stood at $688m in the first four months of this fiscal year against $936m in the same period of last fiscal year.
Month on Month basis, services trade deficit in October 2014 stood at $224m with $597m imports and $373m exports.
The country earned $429bn on account of transportation services, $92m from travel, $261m from telecommunications, $10m from construction services and some $20bn on account of insurance during July-October FY15. On the other hand, transportation payments stood at $1.415bn, travel $397m, telecommunication $120m, construction $4m, insurance $95m and some $89m were paid on account of financial services.
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