Services sector posts $3 billion deficit in 11 months

Thursday, June 18, 2009

KARACHI: The country has registered a deficit of some three billion dollars in services sector trade during the first 11 months (July-May) of the current fiscal year mainly due to high payments on account of transportation, travel and government services. However, the deficit is about 51 percent lower than the same period of last fiscal year ie 2008, in which services sector posted over six billion dollars deficit.

Month on month basis, services sector trade has posted a surplus of 253 million dollars in May 2009, as services sector exports are higher than the imports. Services sector exports stood at 740 million dollars in May 2009 against imports of 487 million dollars. The country posted a deficit of 269 million dollars in April 2009 with 559 million dollars imports and 290 million dollars exports.

The State Bank on Wednesday said the country's services sector trade performance is gradually improving as overall imports and deficit have declined by 5.73 percent and 26 percent respectively during July-May period. Services sector exports in first 11 months stood at 3.656 billion dollars against the imports of 6.638 billion dollars, depicting a deficit of 2.982 billion dollars during July-May.

Services sector deficit is 3.071 billion dollars lower than the deficit witnessed in corresponding period of last fiscal year ie 2008. Services sector deficit in July-May of 2008 stood at 6.053 billion dollars. "Heavy payments on account of transportation, travel services, insurance, technical fee, royalties and government sector are major contributors in the services trade deficit," economists said.

They said that declining imports of services sector and increasing trend in exports is a positive sign, which would definitely help reduce services sector deficit. Export of services sector surged by 26 percent to 3.656 billion dollars during the first 11 months of FY09 over the exports of 2.909 billion dollars in same period of last fiscal year. Services sector imports reduced by 25 percent to 6.638 billion dollars in July-November of FY09 as compared to imports of 8.962 billion dollars in corresponding period of FY08.

The country earned 1.107 billion dollars on account of transportation against payments of 3.211 billion dollars, depicting a deficit of 2.104 billion dollars in first 11 months of FY09. Transportation deficit has contributed some over 70 percent share in overall services sectors deficit, as the country has only one shipping carrier - Pakistan National Shipping Corporation.


(BRecorder)