RECORDER REPORT

KARACHI: Services sector exports have posted 4 percent growth during the first four months of this fiscal year (FY18) supported by improved performance of travel and telecommunication sector.

Economists said that previously growth in services exports was attributed to disbursement of Coalition Support Fund (CSF), however, this year services exports are increasing without payment of the CSF. “The recent growth in exports is supported by improved earnings of travel, telecommunication & information services and government sector,” they added.

They said that Pakistan can earn billions of dollars foreign exchange through services sector to reduce the burden on external account, however it needs a long term policy to facilitate this sector.

According to the State Bank of Pakistan (SBP), services exports have registered 4 percent growth during the July-Oct of FY18. With current surge, services sector’s exports reached $1.663 billion in first four months of current fiscal year compared to $1.598 billion in corresponding period of last fiscal year, depicting an increase of $65 million.

During the period under review, services imports also moved upward side and increased by 6 percent or $194 million. Services sector imports surged to $3.323 billion in July-Oct of FY18 compared to $3.129 billion in same period of FY17.

Cumulatively, services trade has posted a $1.66 billion deficit in July-Oct of this fiscal year, which is some 8 percent higher than the same period of last fiscal year.

During the period under review, the country earned $410 million on account of the government services up from $385 million. Some $335 million arrived on account of telecommunication, computer and information services compared to $287 million previously. With $19 million increase, travel exports stood at $116 million in July-Oct of FY18. In addition, the country earned $329 million on account of transport, $48 million financial services and $377 million on account of other business services.

Major services sector spending was for transportation and travel as most of import/export goods transportation is being managed through foreign shipping lines. Transportation payments (imports) stood at $1.389 billion, travel $761 million, telecommunication computer and information $163 million, insurance and pension $76 million, charges of intellectual property rights $88 million and some $580 million were paid on account of other business services during July-Oct FY18.

Month on Month basis, services trade deficit in October 2017 was $416 million with $861 million imports and $400 million exports.