The country's services trade posted some $3 billion deficit during the first seven months of this fiscal year (FY18). Although services exports performed well and posted 5 percent growth during this fiscal year, however, the higher services import bill offset this growth, resulting in increase in services trade deficit. According to State Bank of Pakistan (SBP), the country's services sector deficit swelled by 9 percent during the first seven months of this fiscal year. Services trade registered a deficit of $2.957 billion during July-January of FY18 compared to $2.685 billion in the same period of FY17, showing an increase of $278 million.
Month-on-month basis, during January 2018, services trade registered a deficit of $401 million with $411 million exports and $812 million imports. Economists said the country is expecting some inflows under the Coalition Support Fund (CSF) from the United State, with the arrival of these estimated inflows; service trade is likely to perform well in coming months.
The detailed analysis revealed that during the period under review, services exports posted an increase of 5 percent, while imports rose by 7 percent. Pakistan's services sector exports moved up by $134 million to $2.995 billion in July-January of FY18 compared to $2.860 billion in the corresponding period of last fiscal year. A healthy rebound in net software services exports, which reached $ 612 million in the period, boosted net exports of the overall telecom, computer and information group by 15 percent in the first seven months of this fiscal year. Apart from telecom and computer services, net exports of transport, travel and government services also performed relatively better as compared to last year.
Similarly, services sector imports stood at $5.952 billion in July-January of FY18 against $5.545 billion in July-January of FY17, showing an increase of $407 million. During the period under review, the country earned $543 million on account of transportation services up from $516 million. In addition, some $217 million from travel, $40 million on account of construction, $63 million through financial services, $19 million from insurance sector and some $759 million on account of government services. Meanwhile, transportation payments (imports) stood at $2.218 billion, travel $1.216 billion, telecommunication $281 million, financial sector $101 million, insurance $137 million, charges for use of intellectual propriety were $139 million and an amount of $329 million was paid as government services.