The country registered a deficit of some 2 billion dollars in services sector during the first five months of the current fiscal year, mainly due to huge payments on account of transportation, travel and government services.
The State Bank of Pakistan on Tuesday said the country's services sector trade performance is improving as overall imports and the deficit have declined by 8 percent and 27 percent, respectively, during July-November of FY09.
Services sector exports in first five months stood at 1.533 billion dollars against imports of 3.59 billion dollars, depicting a deficit of 2.061 billion dollars during July-November of current fiscal year. However, the deficit in the first five months is less than that of the last fiscal year, in which services sector deficit stood at 2.844 billion dollars.
"Heavy payments on account of transportation, travel services, insurance, technical fee, royalties and government sector are the major contributor in the services trade deficit," economists said. However, they said that declining imports of services sector and increasing trend in exports helped reduce the services sector deficit to a great extent.
Export of services sector surged by 42 percent to 1.533 billion dollars during the first five months of FY09 against exports of 1.079 billion dollars during the same period of FY08. Services sector imports dipped by 8.38 percent to 3.594 billion dollars during July-November of FY09 over imports of 3.923 billion dollars during July-November of FY08.
Huge payments of transport sector is the major contributor in overall deficit, as only the transportation sector deficit stood at 1.157 billion dollars against the overall deficit of some 2.061 billion dollars. The country's transportation imports stood at 1.644 billion dollars against exports of some 487 million dollars during first five months of current fiscal year. Meanwhile, services deficit in November stood at 235 million dollars with 562 million dollars imports and some 227 million dollars exports.
The country earned 88 million dollars on account of travel, some 36 million dollars in communication, 31 million dollars in insurance and 27 million dollars from financial sector during July-November period. On the other hand, travel payment stood at 697 million dollars, communication 50 million dollars, construction 34 million dollars, insurance 49 million dollars, financial sector 75 million dollars, computer and information sector payments 44 million dollars. Similarly, royalties and licence fee payments reached 34 million dollars and the government services 128 million dollars.