RECORDER REPORT

KARACHI: Despite less Coalition Support Fund (CSF) inflows, the country’s services trade performed well and posted a lower deficit in the last fiscal year (FY16) compared to FY15.

According to State Bank of Pakistan (SBP), the country’s services trade deficit decline sharply by 18 percent during the last fiscal year. Services trade registered $2.414 billion deficit during July-June of FY16 compared to $2.963 billion in same period of last fiscal year (FY15), depicting a notable decline of $540 million. With over 25 percent decline, transport imports have largely contributed in a lower services trade deficit

Analysts said that although Pakistan has received some $ 515 million less CSF inflows during last fiscal year compared to previous year, the services trade’s statistics are very encouraging. Pakistan had received $937 million on account of logistic support (CSF) during FY16 as against $1.452 billion in FY15, they informed.

“Services sector of the economy has great potential to contribute largely, however there is a need to tap this potential sector by long term policies,” they said.

Detail analysis revealed that during the period under review, imports and exports of services trade witnessed downward trend and declined 11 percent and 7 percent, respectively.

Overall Pakistan’s services exports stood at $5.460 billion during the last fiscal year as against $5.880 billion in FY15, depicting a decline of $420 million. Similarly, services import fell by $969 million to $7.874 billion in FY16 compared to $8.843 billion in FY15. Among imports, transports imports decline sharply 26 percent to $3.077 billion in FY16 as against $4.155 billion in FY15.

During the period under review, the country earned $1 billion on account of transportation services, $322 million from travel, $780 million from telecommunication, $42 million from construction services, $89 million through financial services, $52 million from insurance sector and some $2.153 billion on account of government services.

While, some $1.604 billion were spent on account of travel, $377 million on telecommunication, $192 million on financial services, $255 million on insurance, $119 million on construction and some $463 million were paid as government goods and services.

Month on Month basis, during June 2016, services trade deficit stood at $204 million with $680 million import and $476 million exports.