July-November services trade posts $1 billion deficit

The country's services trade deficit posted a notable decline of 24 percent during the first five months of current fiscal year supported by arrival of Coalition Support Fund. Although, cumulatively, services trade deficit has reached close to one billion dollar in July-November FY15, however the deficit is much lower than the same period of last fiscal year. According to State Bank of Pakistan (SBP), the country's services trade registered a $996 million deficit during the July-November FY15 compared to $1.308 billion in the corresponding period of last fiscal year (FY14), depicting a decline of $312 million or 24 percent.
A detailed analysis revealed that during the period under review exports of services sector performed well, however imports swelled slightly. With an increase of $373 million, exports of services sector reached $2.376 billion mark during first five months of this fiscal year against $2.003 billion in the same period of last fiscal year. Arrival of Coalition Support Fund (CSF) inflows are major reason for higher exports as during this fiscal year Pakistan received two tranches amounting to $735 million on account of CSF. Inflows arrived this fiscal year are almost double the same period of previous fiscal year.
During the period under review, services sector imports surged by 2 percent. Overall, services imports stood at $3.372 billion in July-November FY15 compared to $3.311 billion in the corresponding period of FY14, depicting an increase of $61 million.
According to SBP, during the period under review the country earned $524 million on account of transportation services, $110 million from travel, $320 million from telecommunication, computer and Information Technology, $12 million from construction services, $25 million from insurance, $21 million through financial services and an amount of $1.038 billion have earned on account of government services during July-November of FY15.
Meanwhile, transportation payments stood at $1.686 billion, travel $494 million, telecommunication and computer $159 million, insurance $118 million and financial sector $98 million. In addition, some $50 million have been paid on account of intellectual property rights and $192 million for government services.
Month-on-month basis, with some $296 million exports and $572 million imports, services deficit stood at $276 million in November 2014.