The country''s services trade posted a deficit of $1.2 billion during the first quarter of this fiscal year (FY18), mainly due to higher imports. Economists said rising import bill and slow growth in exports have resulted in a massive surge in services trade deficit during the initial months of this fiscal year. 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 deficit is likely to decline in coming months, they added.

According to State Bank of Pakistan (SBP), the country''s services trade deficit swelled by some 6 percent during the first quarter of this fiscal year. Services trade posted a deficit of $1.225 billion during July-Sep of FY18 compared to $1.157 billion in the same period of FY17, showing an increase of $68 million.

A detailed analysis revealed that during the period under review, services sector exports posted an increase of 5 percent, while imports surged by 6 percent.

Pakistan''s services sector exports stood at $1.271 billion in the first quarter of this fiscal year against $1.204 billion in the corresponding period of last fiscal year, showing an increase of $67 million. Overall, services exports of the first three months of this fiscal year are slightly higher than services trade deficit of $1.225 billion. Similarly, services sector imports posted an increase of $135 million to reach $2.496 billion in July-Sep of FY18 against $2.361 billion in the same period of FY17.

During the period under review, the country earned $262 million on account of transportation services down from $288 million. In addition, some $252 million from telecommunications, computers and information services, $88 million from travel, $15 million on account of construction, $45 million through financial services, $8 million from insurance sector and some $315 million on account of government services came in during this period.

Meanwhile, transportation payments (imports) stood at $1.048 billion, travel $610 million, telecommunication $119 million, financial sector $38 million, insurance $54 million, some $74 million as charges for use of intellectual propriety and an amount of $131 million were paid as government services. Month-on-month basis, during September 2017, services trade registered a deficit of $275 million with $458 million exports and $733 million imports.

Copyright Business Recorder, 2017