$4.125 billion deficit witnessed in service trade
KARACHI (July 26 2007): Country faced a deficit of 4.125 billion dollars in service trade, mainly due to high payments of transportation, construction, financial, computer services and royalties during the 2007 fiscal year.
The central bank statistics revealed on Wednesday that Pakistan had earned 4.125 billion dollars against the payments of 8.250 billion dollars on account of services trade, including transportation, travel, royalties, insurance, financial services during the 2007 fiscal year, depicting a 50 percent or 4.125 billion-dollar deficit.
Major contribution in services trade deficit witnessed in transportation, travel and royalties sectors as the share of only transportation sector in the overall deficit was around 50 percent share. Deficit in transportation and travel services sector reached 3.377 billion dollars, ie around 82 percent of overall deficit faced by country during 2007.
According to the statistics, the country faced 2.03 billion-dollar deficit in the transportation services, export of which amounted to 1.095 billion dollars during 2007 against the imports of 3.127 billion dollars during 2007 fiscal year.
Similarly, some 1.345 billion-dollar deficit was recorded in the travel services, as its imports stood at 1.619 billion dollars during 2007 against the export of 274 million dollars. "Rising imports has played a major role in the services sector's deficit, while the raise in the tariff of shipping line is also another leading factor behind it," said economist Muzammil Aslam.
Pakistan did not have a shipping line, except for one flag carrier, Pakistan National Shipping Corporation (PNSC), exporters and importers were, therefore, compelled to hire international shipping lines, he added "During current fiscal year, the country's services deficit might be higher than the last fiscal year as recently shipping lines had further raised their freights," he said.
On the other hand, healthy exports witnessed in the government services, which have contributed around 45 percent of total export. The government sector shows a surplus income of 1.15 billion dollars, as its service exports touched new mark of 1.84 billion dollars against the imports of 325.6 million dollars during the last fiscal.
Statistics further show that services exports grew by 355 million dollars to 4.125 billion dollars during the last fiscal. During 2006 fiscal year, it stood at 3.769 billion dollars, while imports witnessed a growth of by 51 million dollars to 8.250 billion dollars from 8.198 billion dollars in 2006 fiscal.
During June 2007, services trade faced a deficit of 283 million dollars, as its exports stood at 424 million dollars against the imports of 708 million-dollar imports during June 2007.
Construction sector has performed well during the last fiscal, as there was no deficit. Exports in this sector reached 74.154 million dollars as compared to import of 54.838 million dollars, showing a surplus of 19 .316 million dollars during July-June of 2007.
The country's communication services earning recorded 120.751 million-dollar as compared to 97.533 million dollars payments, while insurance sector's exports stood at 30.422 million dollars against the imports of 125 million dollars, financial services exports reached 80.53 million dollars as compared to imports of 135.476 million dollars during the last fiscal.