ISLAMABAD, Dec 16: The trade deficit in services sector widened by 45.21 per cent during the first month of the second quarter (October 2006) over the same month last year.

Official figures released by Federal Bureau of Statistics (FBS) here on Saturday showed that in absolute term the total value of services deficit rose to $233.260 million during the month under review as against $425.76 million over the same month of the last year.

For the first time, the FBS has started compiling of the trade data in various services sectors regarding exports and imports on monthly basis. However, these data did not depict the share of each sector both in export and import.

The data showed that during July-October of the current fiscal year, the trade deficit increased by 21.86 per cent to $1.559 billion as against $1.279 billion over the same months of the last year.

The analysis of the monthly data showed that export of services rose by 96.66 per cent in October 2006 as it stood at $391.26 million as against $198.95 million over the same month of the last year. However, export recorded a negative growth of 17.91 per cent in July-Oct period of 2006 as it stood at $1.047 billion as against $1.276 billion over the same period of last year.

Analysts said that for the first time export of services started picking up following the liberalisation of the services sectors in the developed countries. They said that major portion of the Pakistani services constitutes from those citizens, who are working in the Middle East, United States and European countries.

The analysts said that in case of relaxation in restrictions on the movement of people to the rich countries, Pakistani export of services like medical, architecture and legal services would record booms.

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.

The import of services declined by 0.03 per cent to reach $624.52 million during the month of October 2006 as against $624.71 million over the same month of the last year.

However, the import of services was up by 2.01 per cent to $2.607 billion during the July-Oct period of the current fiscal year as against $2.556 billion over the same period of the last year.

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.