Pakistan`s trade deficit in services narrowed by over 140 per cent in the first quarter of the current fiscal year, from a year ago due to an unexpected increase in exports and a fall in imports. In absolute terms, the deficit in services fell to $299.80 million in JulySeptember period this year from $745.57 million over the corresponding period last year, suggested data compiled by Pakistan Bureau of Statistics.
In the year 2011-12, the trade deficit in services rose by 55.31 per cent to $3.012 billion from $1.939 billion in the previous year. So far the decline in deficit is driven by increase in export of services, as exports witnessed a surge of 78.14 per cent to $2.120 billion in the first quarter of the current fiscal year from $1.190 billion over the corresponding period last year.
Last year export proceeds from services sector stood at $4.949 billion in 2011-12, compared with $5.767 billion over the corresponding year. The increase in export of services was due to growth in export of travel, construction, insurance, computer and information services, government services and businesses services. However, exports of services witnessed a decline of 25 per cent in September 2012 from a year ago. Pakistan`s leading export of services exports are government services, transport, travel, communication, computer and information and other business. And the minor services for exports include construction, insurance, financial, cultural and recreational services.Pakistan has also opened up its market to foreign services providers particularly in the banking, insurance, telecommunication, retail and some other sectors.
However, contrary to this liberalization, the import of services dropped by 5.95 per cent to $1.820 billion in JulySeptember period this year as against $1.935 billion over the same period last year. Even on monthly basis, the import of services dipped by 13.59 per cent in September 2012 over the corresponding month last year. The sectors in services import that witnessed a decline include transportation, travel, communication, insurance services, financial services, royalties and license, computer and information services and other business services during the months under review over the last year. In 2011-12, the import of services was up by 3.30 per cent to $7.962 billion as against $7.707 billion over the previous year.
Pakistan`s share in global trade in services stood at less than 0.06 per cent in 2011-12, while its share in the domestic Gross Domestic Product (GDP) posted a substantial increase and reached to over 55 per cent from 47 per cent in 1981. Experts say the low share of Pakistan`s trade in service in global trade is because most of the services produced are non-tradable.