ISLAMABAD: Services exports increased by 7.9 per cent in May, marking the fourth straight month of growth, mainly due to increased information technology proceeds.

According to data compiled by the Pakistan Bureau of Statistics, exports reached $687.91 million, up from $637.54 million in the corresponding month last year. Month-on-month, the export grew 6.48pc.

In rupee terms, the export of services grew 5.17pc to Rs191.411bn in May, compared to Rs182.008bn in the corresponding month last year.

The export of services reached $7.129bn in the July-May period of FY24 against $7.004bn in the same period last year, a paltry rise of 1.80pc.

In rupee terms, exports recorded a massive improvement of 17.94pc to Rs2.01tr, up from Rs1.71bn in 11MFY23.

In FY23, the export of services stood at $7.30bn, up from $7.10bn in the preceding year, or 2.78pc.

According to the finance ministry report, the export of information and communication technology (ICT) increased significantly by 17.4pc. It reached $2.3bn during July-March FY24 as against $1.9bn during the same period last year on account of the increased permissible retention limit of IT exporters from 35pc to 50pc of their export proceeds in the Exporters’ Specialised Foreign Currency Accounts.

At the same time, the import of services declined by 10.11pc to $881.04m in May from $980.17m over the corresponding month of last year. The import of services increased by 16.93pc to $9.22bn in 11MFY24 against $7.89bn in the corresponding period last year.

On the other hand, the import of services soared by 20.6pc during July-March FY24 and stood at $7.5bn compared to $6.2bn last year.

The import of transport services increased by 10pc and recorded $3.4bn during July-March FY24 as against $3.1bn in the same period the previous year. The surge in transport payments is attributed to increased fares for air passengers.

The import of travel services increased by 56pc to $1.7bn compared to $1.1bn last year. A hike in sea freight despite declining merchandise imports reflects an increase in shipping rates in the wake of the Red Sea attacks and associated higher insurance premiums.

The cost of re-routing business services also increased by 11.2pc during July-March FY24 and reached $1bn compared to $0.9bn during the same period last year.

The trade deficit in services widened by 136.26pc to $2.09bn in July-May compared to $888.52 m in the corresponding months last year. In May, the trade deficit in services decelerated by 136.26pc to $193.13m, compared to $342.63m in the corresponding month last year.

Published in Dawn, July 7th, 2024