Trade deficit from services sector jumps up by 19% in the fiscal year 2018

Trade in services witnessed an overall deficit of $5.17 billion in the fiscal year 2018, compared to a deficit of $4.34 billion during the previous fiscal year. This translates to a 19% increase in the trade deficit arising from the services sector.

Pakistan obtained services worth $10.37 billion from foreign enterprises in the fiscal year 2018, while services provided by the country to other foreign companies and individuals have been reported at $5.2 billion.

The bulk of our service imports comes from the transport sector since a total of $4 billion worth of payments were made to foreign companies for imports of sea, air, road and rail services. In comparison, our exports of transport services remain minimal and were reported at $977 million in the fiscal year 2018. Even though our export of transport services have increased from the $924 million worth of transport-related exports a year ago, the rise in import of transport services has outpaced that of exports.

Payments to foreign companies handling sea freight comprise the major portion of our import of transport services, as the country paid about $2.3 billion to these companies in the fiscal year 2018. This is a 12% jump from what payments worth $2 billion in the previous fiscal year.

Services from foreign companies covering air transport, including services related to both freight and passengers, is another major portion of our import portfolio for services. In the fiscal year 2018, payments to these companies amounted to $1.4 billion, down from the $1.5 billion we paid in the fiscal year 2017.

Foreign traveling is another major service that the country acquires from foreign companies. A total of $2.1 billion were spent on traveling services from foreign companies, against $2 billion spent in the previous fiscal year.

Services for personal traveling make up the bulk of travel services requirements, with the nation spending $1.69 billion to companies providing travel services in the fiscal year 2018. This is only a marginal increase from the $1.64 billion spent on personal traveling a year before. Religious traveling services are one of the most utilized in Pakistan for personal travel, as we spent nearly $449 million from July 2017 to June 2018 on these services. In the fiscal year 2017, the country had paid $475 million for these services.

The need for services related to business travel from foreign companies, on the other hand, witnessed a significant increase as citizens paid a total of $51.2 million in the fiscal year 2018, compared to $37 million a year ago, an increase of about 38%.

Posted on: 2018-08-01T15:26:00+05:00