Shrinking exports have increased the country's services sector deficit by some 52 percent to about $4 billion during the Jul-January period of the current fiscal year against same period of last year.
Economists said that heavy payments of transportation, travel services, insurance, technical fee, royalties and government sector are the major contributors in the increasing services trade deficit, besides declined in the services sector exports. However, they believed that declining exports and increasing imports of the services sector are the chief reasons behind the huge services sector deficit.
State Bank statistics show that service sector deficit has reached $3.987 billion, as services exports amounted to $1.621 billion against imports of some $5.608 billion. The deficit is 51.53 percent or $1.3 billion higher than the corresponding period of last fiscal year.
During the July-January 2008 services sector deficit stood at 3.9 billion dollars as compared to 2.631 billion dollars during corresponding period of 2007. Economist said that during the current fiscal despite the huge raise in services sector imports, the exports did not increase, which pushed the deficit on upward side.
High services sector deficit also contributed to the rise in current account deficit, which reached the level of 7.5 billion dollars. The overall exports of services sector declined by 29 percent, while imports showed a growth of 14 percent during the July-January period of current fiscal year.
Overall services sector exports has reached at 1.621 billion dollars as compared to 2.284 billion dollars during corresponding period of fiscal year 2007, depicting a declined of 663 million dollars during the first seven months.
The imports of services sector registered a rise of 693 million dollars to 5.608 billion dollars during July-January as compared to 4.915 billion dollars during the same period of last fiscal year.
The government sector exports declined by 65 percent to 330 million dollars, which previously stood at 953 million dollars. Economists said that during the current fiscal not a single penny was received on account of reimbursement from the US.
However, they believed that after the inflow of this payment the exports graph would up in the future. Despite the increase in exports of services sector trade, it is expected that during the current fiscal year services deficit would also reach new peak level like trade deficit, they added.