ISLAMABAD, Nov 16: The first quarter external trade data released on Wednesday showed that the trade deficit in services was wider than the corresponding months of last year as exports witnessed a decline at much higher rate than imports.

The export in services during July-September of the fiscal year 2006-07 dipped by 39.07 per cent to fetch a total $656.44 million as against $1.077 billion over the corresponding period of last year. The imports grew by 2.67 per cent to reach $1.983 billion during the first quarter under review as against $1.931 billion of the last year.

This growth in import of services as against the massive decline in exports during the period under review resulted in trade deficit of $472.36 million or 55.30 per cent.

The statistics showed that the trade deficit of first quarter of 2006-07 reached $1.326 billion as against $854.20 million over the same period of last year.

Analysts told Dawn that Pakistan’s share in the world services sector could not grow beyond 0.23 per cent due to a number of impediments and obstacles. The share of services sector in the GDP stood at around 60 per cent.

The Pakistan government services and communications services were the only sectors, which stood in surplus, while the rest remained in the deficit during the past years. These barriers--both tariff and non-tariff--restricted the entry of Pakistani services providers to the market of both the developed and developing countries.

According to the statistics, the export of services declined by 56.91 per cent during the month of September 2006 to $229.30 million as against $532.10 million over the same month of the last year. While the imports surged by 5.72 per cent to $669.20 million during the month under review as against $633 million over the same month of last year.

This increase in import of services and decline in exports have resulted in a growth of 335.98 per cent in the trade deficit of services during the month of September 2006 over the same month of the last year.

Analysts said that there was a significant scope for trade in services like financial, construction and some businesses such as computer and information technology, engineering and legal and accounting services.

Pakistan’s services exports to various countries mainly face the problem of quality, acceptance of professional credentials, visa restrictions, re-certification process, multiple taxation regimes, and above all country’s image problem after 9/11.