KARACHI, Aug 29: Pakistan’s imbalance in import-export of services during the outgoing fiscal 2006-07 showed a slight improvement to $4.13 billion from $4.43 billion in 2005-06.
An inflow of $1.2 billion on account of logistic support being offered to foreign countries in fight against international terrorism is one of the main contributing factors.
Official statistics show that total import bill of services went up to $8.25 billion in 2006-07 from $8.19 billion. As against this, export of services generated an inflow of $4.12 billion last fiscal compared to $3.76bn in 2005-06.
Sources in insurance, IT and banks are confident of pushing up export of services to $5 billion a year in a next few years provided the government gives some support to local business and services in expanding their network in the foreign countries.“Shipping remains an untapped area,’’ argued a market watcher who said development of a national fleet will curtail expenditure of more than $3 billion of freight being given to foreign shipping lines for our international trade. “Shipping has a potential to earn a big freight revenue,’’ he said.
In 2006-07, the government services generated the highest amount of foreign exchange that amounted to $1.84bn as against $1.66 billion a year earlier.
The logistic support being given to foreign countries contributed $1.24 billion in the last fiscal as against a little over $1 billion in 2005-06.
Transportation services netted over $1 billion, followed by $459 billion obtained from business services in foreign countries.
Visitors to Pakistan — tourists and businessmen — contributed $274 million, followed by $121 million from communications services abroad.
Pakistan’s construction services abroad showed an impressive growth to $74 million in 2006-07 from $16 million a year ago showing more than four times rise.
Insurance services yield was $30 million, financial services $81 million, and computer and IT $107 million. On the import side, transportation claimed $3.12 billion in 2006-07, up from $2.81 billion in 2005-06.
Foreign travel cost Pakistan $1.62 billion while communications services claimed $98b, construction services $55 million, insurance services $125 million, financial services $135 million, computer and IT $90 million.
Pakistan has to pay $115 million royalties and licence fee and $326 million for government services. The business services took away $2.55 billion while government services cost $326 million.
In overall import-export of goods and services, Pakistan suffered a total imbalance of $13.99 billion in 2006-07, up from $12.87 billion in 2005-06.
The import bill for goods and services amounted to $35.22 billion last fiscal as against export earnings of $21.22 billion from goods and services.
A year earlier in 2005-06, total import bill of goods and services was worth $33.19 billion as against export worth of $20.33 billion.
The current account foreign exchange deficit during 2006-07 was financed to a large extent by remittances, GDRs, FDIs and privatisation proceeds.
Market watchers predict hard days for plugging current account deficit in the current fiscal year because privatisation has come to an almost abrupt halt, and probably environment is not that favourable for GDRs as it was in last fiscal. Expansion in trade imbalance of goods and services is bound to bring Pakistani currency under pressure in the current fiscal year.