January 21, 2021: Pakistan’s trade deficit in services witnessed a significant increase in the month of December 2020 as it rose by 3.55x to stand at $128 million against the deficit of $36 million recorded in November 2020.
According to the latest figures published by the State Bank of Pakistan (SBP), the country’s trade deficit declined by 37% when compared to a deficit of $204 million reported in December 2019.
During Jul-Dec FY21, the trade deficit in services decreased by 42.4% to clock in at $977 million when compared to a deficit of $1.69 billion in Jul-Dec FY20 as imports of services plunged by 15.7% YoY to $3.82 billion while exports showed a mere improvement of 0.32% YoY to clock in at $2.84 billion during the period.
During the quarter ended December 2020, the trade deficit stood at $444 million, i.e. around 17% lower as compared to the deficit of $533 million in the quarter ended September 2020.
Going into details provided by SBP, the exports of services during December 2020 amounted to $628 million, which is higher by around 23% MoM and 14% YoY.
Amongst the total exports, Telecommunications, Computer and Information Services made the largest contribution with an amount of $194 million i.e. higher by 44% as compared to last year, followed by Transport and Travel Services which brought in $50 million and $55 million, respectively, i.e. down by 30% YoY and 4% YoY, respectively. Items like Other Business Services and Government Goods and Services contributed nearly $153 million and $132 million to the national exchequer.
On the other hand, the imports of services during the month amounted to $756 million i.e. higher by 38% MoM but also the same as the figures reported during same month of last year.
Amongst the total imports, the largest expenditure was incurred on Transport services for an amount of $252 million, i.e. down by 13% YoY. This was followed by Telecommunication and Travel Services, that costed nearly $ 87 and $79 million, respectively, i.e. up by 78% and down by 39% YoY, respectively.
Other major items imported during the month include Intellectual Property Charges ($24 million, up 2x YoY), Financial Services ($23 million, up 92% YoY), and Insurance and Pension Services ($17 million, down 39% YoY).
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