Trade deficit in services narrows by 87.6% in FY23

July 18, 2023 (MLN): The service sector of Pakistan posed a trade deficit of $720 million in FY23, posting a significant drop of around 88% YoY as compared to $5.84bn in FY22, the latest data released by the State Bank of Pakistan (SBP) showed.

Similarly, the deficit narrowed by 87% YoY and 71.6% MoM to stand at $84mn in June 2023 compared to a deficit of $665mn in June 2022 and $296mn in May 2023, respectively. 

Details made available by SBP revealed that the exports of services in FY23 increased by 2.77% YoY to $7.3bn compared to $7.1bn in FY22.

Amongst the total exports, telecommunications, computers, and information services made the largest contribution with an amount of $2.6bn in FY23, witnessing a meager decrease of 0.53% YoY compared to FY22. 

This is followed by other business services that brought $1.56bn into the country. In terms of growth, receipts from the exports of other business services moved down by 7.27% YoY compared to $1.69bn in the same period last year.

Moreover, the export of transport and travel services contributed an amount of $893mn and $947mn, respectively in the review period.

On the other hand, the imports of services during the year amounted to $8bn, slumped by 38% YoY when compared to around $13bn in FY22. 

Amongst the total imports, the largest expenditure was incurred on travel services for an amount of $1.86bn, witnessing a jump of 32.27% in FY23.

On the other hand, the transport services cost the country around $3.88bn, recording a notable decline of 47.56% YoY compared to $7.4bn in FY22.

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