Services sector’s trade deficit reaches US$1.166 billion in 5MFY12

Karachi: The services sector’s trade deficit has reached to US$ 1.166 billion in the 5MFY12 primarily on the back of high imports and stagnant exports.

According to Alfalah Securities Limited, the State Bank of Pakistan (SBP), services sector’s trade deficit has witnessed an increase of US$ 182 million (18.5% YoY) to US$ 1.16 billion in 5MFY12 against US$ 0.984 billion in the corresponding period last year. The exports of the services sector stood at US$ 2.023 billion in 5MFY12 against US$ 2.038 billion in 5MFY11, showing a decline of US$ 15 million whereas the services sector imports reached to US$ 3.189 billion in 5MFY12 against US$ 3.022 billion in the corresponding period last year, witnessing an increase of US$ 167 million.

Meanwhile on monthly basis, the services sector’s trade deficit stood at US$ 200 million in November 2011 which comprises of US$ 376 million exports and US$ 576 million imports. The rising services sector’s trade deficit has also caused a massive increase in the Current Account Deficit (CAD) of the country which has reached to US$ 2.1 billion in the ongoing financial year. The government is required to come up with prudent policies for curtailing the services sector’s deficit which would also provide a shelter to the deteriorating Current Account Deficit of the country in the long term.

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