Trade deficit in services expands for the third consecutive month

February 12, 2019 (MLN): Pakistan’s trade deficit in services has been widening for the last three months now, from October 2018 to December 2018, official data documented by the Pakistan Bureau of statistics (PBS) reported yesterday.

Nevertheless in a broader frame, the deficit narrowed down by 29% in the July-Dec FY19 period, according to records. The deficit for these 6 months is $1.95 billion while last year during this period, it was $2.7 billion.

The import of services ($4.5 billion) during this time span dropped by almost 16%, YoY while exports ($2.6 billion) declined by a much smaller margin of 2.4%, YoY.

Specifically in the month of December, the trade deficit shrank by 20.5% on a year on year basis, but widened by 14.4% as compared to previous month.

Although in terms of percentage change, the exports in December rose by a larger margin than imports when compared to November 2018’s figures. But in absolute terms imports grew by around $130 million while exports expanded by less than a $100 million, hence resulting in a wider deficit this month.

On the whole, given a year-on-year scenario, Pakistan’s position in terms of balance of trade in services has been improving steadily since the last 5 months (since August 2018), but on  a month on month basis, this marks the third consecutive month when the deficit has expanded compared to prior month.

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