July-April services trade deficit plunges 33 percent YoY

The country's services trade deficit plunged by 33 percent during the first ten months of this fiscal year (FY20), supported by contraction in imports.
Economists said that although services exports have still not picked up, the massive reduction in service import bill is encouraging and largely contributed to a lower deficit. A notable decline in services trade deficit will also help reduce pressure on external account, they added.
According to the State Bank of Pakistan (SBP) the country's services sector trade posted a deficit of $2.617 billion during July-April of FY20 compared to $3.93 billion in same period of last fiscal year (FY19), depicting a decline of 33.4 percent or $1.313 billion.
The detailed analysis revealed that during the period under review, services sector imports shrank by 19 percent supported by lower travel and transport import expenses. Pakistan's services sector import stood at $7.285 billion in the first 10 months of this fiscal year against $8.982 billion in the corresponding period of last fiscal year, down $1.697 billion.
Services trade export failed to post growth and fell by some 8 percent during the period under review. With $384 million decline, services sector exports stood at $4.668 billion in July-April of FY20 down from $5.052 billion in the corresponding period of last fiscal year.
The country earned some $1.177 billion on account of telecommunications, computers and information services, $982 million from government services, $688 million from transport, $444 million from travel, $142 million through construction and $1.124 billion on account of other business services.
Meanwhile, during the period under review, services sector payments of transport sector stood at $2.763 billion, travel $1.166 billion, $318 million on account of telecommunication and information services, $148 million as charges for use of intellectual propriety and an amount of $267 million were paid as government goods and services.
Month-on-month basis, during April 2020, services trade posted a deficit of $170 million with $415 million exports and $585 million imports.