With the support of massive rise in exports, the country's services trade deficit shrunk by 28 percent to $1.4 billion during ten months of current fiscal year. The sharp decline in the services sector deficit also supported the country's current account to become surplus. Current account became surplus by $748 million during July-April of fiscal year 2010-2011 compared with $3.456 billion deficit in corresponding period of last fiscal year.
The State Bank said that the country's services sector trade performance has been very encouraging during the current fiscal year and services sector deficit, which was on surge during last few years, has reduced by 28 percent or $545 million during first ten months of fiscal year 2010-11.
Services sector deficit declined to $1.392 billion in July-April of current fiscal year as against $1.937 billion in same period of last fiscal year. During the period under review exports of services sector stood at $4.66 billion and imports at $6.054 billion.
Detailed analysis showed that services sector imports continued to shrink and registered a decline of 7 percent $377 million during the period. With current decline, overall services imports declined to $5.677 billion in first ten months of current fiscal year compared with imports of $6.054 billion in corresponding period of last fiscal year. During the period, services sector exports posted a surge of 25 percent or $922 to $4.662 billion from $3.740 billion.
"Although services deficit have witnessed a sharp decline during the current fiscal year, but it is still at a high level and should be reduced", economists said. Rising trend in exports of services sector is a positive indication, they added. High payments of transportation travel services, insurance, technical fee, royalties and government sector were major contributors in import of services, they said.
Month on month basis, services deficit in April 2011 stood at $144 million along with $457 million exports and $601million imports. The country earned $1.18 billion on account of transportation services, $289 million from travel, $194 million from communication, $16 million dollars from construction services and some 2.114 billion on account of government services during July-April of 2010-11.
On the other hand transportation payments stood at $3.22 billion, travel $792 million, communication $144 million, construction $22 million, insurance $128 million, financial sector $92 million and computer and information sector payments $132 million during the period. In addition, some $94 million was paid on account of royalties and $500 million were paid for government services.