Trade deficit in services sector falls 51pc to $1.51bn in 11 months

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SBP keeps policy rate unchanged at 7% for next two months
Islamabad

Pakistan’s trade deficit in the services sector during the first 11 months (July-May) of the current financial year 2020-21 decreased by 51 percent to $1.51 billion as compared to the same period of the last financial year.

According to the figures published by the State Bank of Pakistan (SBP), the deficit in the services sector increased by 234.6 percent on a year-on-year basis to $87 million during the month of May 2021 from $26 million in the same month a year ago.

On a sequential basis, the country’s trade deficit in services increased by 53 percent on a month-on-month basis.

Details made available by the central bank revealed that the exports of services during the month amounted to $496 million, i.e. up by 37 percent on a year-on-year basis, while declined by 4.25 percent on a month-on-month basis.

Amongst the total exports, telecommunications, computer and information services made the largest contribution with an amount of $200 million, showing an improvement of 59 percent on a year-on-year basis and 2.04 percent on a month-on-month basis in the month of May 21.

This is followed by “other business services” that brought $119 million into the country. Receipts from the exports of said services swelled by 35.25 percent on a year-on-year basis while went down 8 percent on a month-on-month basis during May 21.

Moreover, the export of transport and travel services contributed an amount of $47 million and $33 million, marking a growth of 9.3 percent and 65 percent, respectively, on a year-on-year basis.

On the other hand, the imports of services during the month amounted to $583 million, showing an increase of 51 percent on a year-on-year basis and 1.39 percent on a month-on-month basis.

Amongst the total imports, the largest expenditure was incurred on transport services for an amount of $268 million i.e. up by 90 percent on a year-on-year basis, while compared to previous month it remained flat.

This was followed by “other business services” which cost the country around $96 million i.e. lower by 24 percent on a month-on-month basis while up by 11.63 percent on a year-on-year basis in May 2021.—TLTP

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