ISLAMABAD, Sept 15: Pakistan’s trade in services narrowed as it fell by 2.62 per cent in the first month of the current fiscal year, from a year ago.

Pakistan’s share in global trade in services stood at less than 0.06 per cent in 2011-12, while its share in the domestic Gross Domestic Product (GDP) posted a substantial increase and reached over 55 per cent from 47 per cent in the year 1981.

Exports of services fell by 8.48 per cent and imports by 5.99 per cent in the first month of the current fiscal year over last year, reflecting a further decline of Pakistan’s share in global trade in service, suggested data compiled by Pakistan Bureau of Statistics.

In the year 2011-12, trade deficit in services rose by 55.31 per cent to $3.012 billion from $1.939 billion in the previous year.

Dr Zafar Mahmood, Prof of Economics at Pakistan Institute of Development Economics, said that low share of Pakistan’s trade in service in global trade is because most of services produced are non-tradable.

At the same time, he said that between 2005 and fiscal year 2010, services exports grew at 9.5 per cent, as compared to 6.4 per cent in commodity producing sector.

Pakistan’s leading export of services exports are government services, transport, travel, communications, computer and information and other business.

And the minor services for exports include construction, insurance, financial, cultural and recreational services.

Dr Zafar listed a number of barriers to trade in services. These include regulatory barriers, discriminatory requirements, economic need tests, non-national treatment, non-MFN treatment, imperfect market structure and prudential supervision.

Statistics showed that Pakistan’s exports in services dropped by 8.48 per cent to $324.08 million in July 2012 as against $354.10 million in the corresponding month of the last year.

Last year export proceeds from services sector stood at $4.949 billion in 2011-12 as against $5.767 billion over the corresponding year.

On the other hand, Pakistan has opened up its market for foreign service providers, particularly in banking, insurance, telecommunications, retail and some other sectors, which were flooded by service providers from abroad.

However, statistics showed that import of services also dipped by 5.99 per cent to $579.12 million in July 2012 as against $616 million over the same months last year.

In 2011-12, import of services increased by 3.30 per cent to $7.962 billion as against $7.707 billion over the previous year.

Pakistan’s major imports include transportation, travel, communications, insurance services, financial services, royalties and licence fees, other business services, construction services, computer and information, personal, culture services and government services.