The country''s services trade deficit fell sharply 30 percent during first seven months of this fiscal year (FY16) supported by lower imports bill. Economists said that downward trend in the commodity price on international front has largely contributed in lower services deficit. Adding that massive decline in service deficit will help to ease pressure on the country''s external account.
They said that services deficit is likely to further reduce in coming months with support of Coalition Support Fund (CSF) inflows. Pakistan had so far received some $713 million under CSF during current fiscal year and another tranche is likely to release during this quarter, they added.
According to State Bank of Pakistan (SBP) the country''s services trade registered a $1.278 billion deficit during July-January of FY16 compared to $1.824 billion in same period of last fiscal year, depicting a notable decline of 30 percent or $546 million.
The detail analysis revealed that during the period under review services sector exports and import are on decline and fell 7 percent and 14 percent respectively. Pakistan''s services sector exports stood at $3.093 billion in first seven months of FY16 as against $3.289 billion in corresponding period of FY15, depicting a decline of $250 million.
Similarly, services trade import bill fell $742 million to $4.371 billion in July-January of FY16 relative to $5.113 billion in same period of last year. The massive decline in attributed to lower oil prices in the world market, of which transportation and travel import bill reduced significantly. Pakistan''s transportation expanses shank to $1.752 billion in first seven months of this fiscal from $2.386 billion in same period of last fiscal year.
Month on Month basis, during January 2016, services trade deficit stood at $265 million with $311 million exports and $576 million imports. It may be mentioned during FY15 the service sector posted a deficit of $2.9 billion with $8.8 billion imports and $5.9 billion exports.
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