Services’ Trade Deficit Widens 63.64% to $3.179 Billion

By Irfan Ahmed

ISLAMABAD, May 12 (INP-WealthPK): The trade deficit of services from July-March (2021-22) was recorded at $3.179 billion as against $1.943 billion from July-March (2020-21), showing an increase of 63.64%, reports INP-WealthPK.

According to the data released by the Pakistan Bureau of Statistics (PBS), services’ exports witnessed an increase of 17.07% to $5.156 billion during the first nine months of the current financial year (2021-22) compared to the corresponding period of the last year.

Services’ imports also rose by 31.33% from $6.347 billion last year to $8.335 billion during the period under review.

Source: PBS website/WealthPk research

On a year-on-year basis, the export of services during March 2022 grew by 20.19% to $668 million against $556 million during March 2021.

Services’ imports also grew by 25.29% from $744 million last March to $932 million in March 2022, the data revealed.

The services trade deficit expanded 40.37% on a year-on-year basis to $236.86 million in March 2022 against $187.97 million in March 2021.

Source: PBS website/WealthPk research

The services trade deficit shrank 9.30% month-on-month to $263.86 million in March 2022 as against $290.93 million in February 2022.

On a month-on-month basis, services imports increased by 12.87% in March 2022 to $932.15 million from $825.85 million in February 2022.

Furthermore, the export of services increased by 24.93% in March 2022 to $668.29 million from $534.92 million in February 2022, the data revealed.

Meanwhile, services exports witnessed an increase of 17.07% during the first nine months of the financial year 2021-22 compared to the corresponding period of last year.

The overall exports increased by 24.67% and reached $23.298 billion in the first nine months (July-March) of the current fiscal year 2021-22 compared to $18.687 billion during the same period of 2020-21.

Overall, the imports climbed by 48.63% in the first nine months of the current fiscal year (July-March), reaching $58.691 billion, up from $39.489 billion in the same period of the previous year.

Pakistan’s overall trade deficit widened by 70.14% to $35.393 billion during the first nine months of the current fiscal year 2021-22 compared to $20.802 billion in the same period of FY2020-21.

Source: PBS website/WealthPk research

The entire export was boosted by the highest-ever rise in IT-related services. Finance and insurance, transportation and storage, wholesale and retail trade, public administration, financial services, education, and health care are all examples of services’ exports.

The services sector has risen to become the primary engine of economic growth, accounting for 61% of GDP in 2020-21, up from 56% in 2005-06.

In the budget for 2022-23, the government should announce steps to promote the export of services, particularly information technology.