ISLAMABAD: Service trade deficit jumped 46 per cent to $361 million in August compared to July, official data showed on Wednesday, as imports grew at a faster pace than exports.
Exports rose 3.6 per cent to $575m in August compared to July while imports increased 16.6pc to $936m, pushing up the deficit, according to data released by the Pakistan Bureau of Statistics.
The two months’ combined export figure was a little higher than last year’s, as proceeds grew 8pc to $1.13bn in July-August, mainly driven by IT-related proceeds.
The August’s proceeds of $575.14m were also 4pc higher compared to the same month last year. In the previous fiscal year (2021-22), service exports jumped 17pc to $6.97bn.
July-August gap shrinks 10pc to $609m
The government set a service exports target of $10bn for the ongoing fiscal year (2022-23), whereas the export target for commodities has been set at $35bn.
A rise in service exports has come particularly on the back of substantial growth in IT exports. Other services sold by Pakistan abroad include finance and insurance, transport and storage, wholesale and retail trade, public administration and defence sectors.
To promote IT exports, the Pakistan Software Board has created an entire IT Export Strategical Framework and is executing programmes and schemes accordingly through a series of projects, programmes in infrastructure development, human capital development, company capability development, global marketing, strategy and research, promotion of innovation and technologies.
The service sector has emerged as the main economic growth driver and contributed 61pc to GDP in 2020-21 compared to 56pc in 2005-06.
Imports: Service imports rose 1.15pc to $1.738bn in July-August from $1.72bn a year ago. In August, proceeds fell 0.54pc to $936m from a year ago but were 16.6pc higher than July. In the previous fiscal year, service imports jumped 43.5pc to $12.143bn.
The trade deficit in services dropped by around 10pc year-on-year to $608.7m in July-August. It more than doubled to $5.175bn in the 2021-22 fiscal year from $2.515bn a year earlier.
Published in Dawn, October 6th, 2022