Service sector trade deficit increased by 42pc during July

Islamabad: Data released by the State Bank of Pakistan (SBP) revealed Pakistan’s service trade deficit had shot up by 42pc during the first month of new financial year 2017-18.

An article in a local newspaper reported that according to economists, the increasing services trade deficit would put severe pressure on the external front, which had recorded a $2 billion current account deficit during July 2017.

The figure of services trade deficit for July 2017 was reported at $489m in comparison to $344m in same period last year (SPLY), registering a 42pc increase.

Constituents that form a major part of services trade are imports and exports. Imports increased at a faster pace of 29pc. Service sector imports registered a staggering increase of 22.28pc to reach $893m during July 2017 in comparison to $694m in SPLY.

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Transportation and travel payments contributed heavily to the service sector import bill forming 68pc of its total bill.

Import bill of transport sector was recorded at $383m, rising 46pc from SPLY and travel sector figures reached $229m to increase by 35pc from SPLY.

Services sector exports were recorded at $404m in July 2017 against $350m in SPLY, registering an increase of 13.36pc.

In this period, $28m were earned by the government from travel services, $87m from computer and telecommunication services, $92m from government services and goods, $84m from transportation services, $82m from insurance sector.

Payment for imports of telecom equipment stood at $34m, insurance payments of $12m, financial sector $9m, $20m for intellectual property usage and $32m for government goods and services.

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