Services sector faces deficit of $2.3 billion

[LahoreEstate]

KARACHI (January 21 2009): The country has faced a deficit of 2.3 billion dollars in services sector mainly due to high payments of transportation, travel and finance during the first half of the current fiscal year 2009. Although, the deficit is some 30 percent less than the deficit faced in same period of last fiscal year 2008, in which services sector deficit stood at 3.29 billion dollars.

Central bank statistics revealed that overall Pakistan has earned 1.847 billion dollars on account of services sector exports against the imports of some 4.15 billion dollars during the first half of the current fiscal year, depicting a deficit of 2.303 billion dollars.

The imports went down whereas exports registered a positive growth during the first half. Imports of services sector have declined by 11 percent to 4.15 billion dollars in July-December of the current fiscal year as compared to imports of 4.687 billion dollars during the corresponding period of last fiscal year 2008.

Services sector exports have surged by 33 percent to 1.847 billion dollars in the first half of 2009 over the exports of 1.391 billion dollars in the same period of fiscal year 2008. Major contributor in services trade deficit was witnessed by transportation, travel, and financial services, as only transportation sector has contributed around 50 percent share in overall deficit faced by services sector during the first half.

Transportation sector has witnessed a deficit of some 1.3 billion dollars with import of 1.927 billion dollars and exports of some 590 million dollars during the July-December of fiscal year 2009. Similarly, some 633 million dollars deficit has been recorded in the travel services, as its imports stood at 745 million dollars against the export of 112 million dollars during the period.

Economists said that with government's efforts the services sector deficit is on the decline, which would also help to reduce the current account deficit. The declining trend in services sector deficit would also save the country's foreign reserves, they added. Economists said the country does not have any shipping line except the one flag carrier Pakistan National Shipping Corporation (PNSC).

Therefore exporters and importers are compelled to hire and pay to the international shipping lines, which resulted in the transportation deficit increasing gradually. However, they hoped that during current fiscal country's services deficit might be lower than last fiscal due to decline in imports and increase in exports.

http://brecorder.com/index.php?id=867121...=&supDate=