July-Nov services sector deficit falls over 50pc to $865m YoY

KARACHI: Services sector is presenting an improved picture with some 50 percent decline in the trade deficit during the first five months of current fiscal year (FY23) supported by exports growth and lower import bill.

According to State Bank of Pakistan (SBP), services sector trade recorded a deficit of some $865 million during July-Nov of FY23 compared to $1.713 billion deficit in same period of last fiscal year, showing a decline of 50.5 percent or $848 million.

The detailed analysis revealed that exports posted 6 percent growth to reach $2.9 billion mark in the first five months of FY23 as compared to $2.743 billion in corresponding period of FY22.

Telecommunications, Computer, and Information Services contributed a major share in the total exports. Overall, Pakistan exported Telecommunications, Computer, and Information related services worth $1.087 billion in July-Nov of FY23 as against $1.051 billion in same period of last fiscal year.

Q1 services trade deficit declines 26pc to $647m YoY

During the period under review, the country earned $392 million on account of transportation services, $205 million from travel, $19 million from construction services, $35 million on account of financial services and some $474 million on account of government goods and services.

On the other side, second component of services sector-imports have also showed an improved picture as it has registered a decline of 15.5 percent. Overall services imports decreased to $3.765 billion in July-Nov of FY23 as against imports of $4.456 billion in corresponding period of last fiscal year.

In the import segment, transportation payments stood at $2.366 billion, travel $446 million, Telecommunications, Computer, and Information related services worth $152 million, insurance and pension $112 million, financial services $101 million and other business services sector payments stood at $480 million during the period under review.

On month-on-month basis, services trade posted a deficit of $65 million with $650 million exports and $715 million imports in November 2022.

Copyright Business Recorder, 2022