The country''s services trade deficit rose sharply by 30 percent during the first seven months of this fiscal year (FY17), mainly due to lower exports. Analysts said that the pending Coalition Support Fund (CSF) inflows have largely contributed to the higher services trade deficit. Pakistan was expecting over $1 billion inflows under the CSF during this fiscal year, however against the expectations, not a single penny has arrived as yet, resulting in massive increase in the deficit, they added.
Pakistan had received some $ 713 million during the first seven months of last fiscal year and with the arrival of these inflows, the service trade to post a lower deficit last year. "Service trade deficit may be reduced, if the estimated CFS inflows will get matured," they added. According to State Bank of Pakistan, the country''s services trade registered a deficit of $ 1.986 billion during July-January of FY17 compared to $ 1.535 billion in the same period of FY16, depicting an increase of 29.4 percent or $ 451 million.
The detailed analysis revealed that during the period under review, services sector exports fell by 10 percent. Pakistan''s services sector exports stood at $ 2.896 billion in first seven months of this fiscal year against $ 3.228 billion in the corresponding period of last fiscal year, down $ 332 million. Similarly, services sector imports surged by 2.5 percent or $ 119 million to reach $ 4.882 billion in July-January of FY17 compared to $ 4.763 billion in the same period of FY16.
The country earned $584 million on account of transportation services, $185 million from travel, $530 million from telecommunication, $42 million from construction services, $57 million through financial services, $84 million from insurance sector and some $759 billion on account of government goods and services during first seven months of FY17.
Meanwhile, transportation payments (imports) stood at $2 billion, travel $939 billion, telecommunication $220 million, financial sector $148 million, insurance $159 million and some $125 million as charges for use of intellectual property. Month-on-month basis, during January 2017, services trade deficit stood at $ 255 million with $633 million import and $378 million exports.
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