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Pakistan’s Services Trade Deficit Decreased by 43% in FY21: SBP

Pakistan’s service trade deficit decreased substantially by 43 percent during the previous fiscal year 2020-2021 (FY21), according to the data released by the State Bank of Pakistan (SBP).

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The improvement was mainly due to the lower international travel payments in the wake of the COVID-19 pandemic.


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The SBP data showed a services trade deficit at $1.875 billion during FY21 as compared to $3.316 billion in FY20. This is a decrease of $1.441 billion in deficit.

The lower services trade deficit has also aided in keeping the current account deficit in control, which had fallen by 58 percent to $1.8 billion during the last fiscal year.

Another reason that caused the decrease in the deficit was the direct import-export equation whereby the import payments had dropped by 11 percent as exports recorded 9.19 percent growth during FY21.

In monetary terms, the exports of services showed an increase of $500 million, clocking at $5.937 billion for the period, while the cost of imports went down by $941 million to clock in at $7.812 billion for the year in concern.

The import payments were lowered primarily through reduced air travel, which is not only a significant contributor to import costs, but was also impacted drastically by the pandemic. The payments under this category declined by 33 percent and amounted to $825 million in FY21.


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Financial services also showed decreased payments that went down from $468 million in FY20 to $185 million in FY21. Freight import payments also recorded a slight decrease of $87 million to $2.949 billion for the year under concern.

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On the other hand, services exports were boosted by the information and communication technology sector. This segment recorded a notable growth of 47 percent in receipts, clocking in at $2.123 billion for FY21, up from $1.440 billion from the year before.

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