ISLAMABAD: Export of services witnessed a decline of over 21 per cent in the outgoing fiscal year (2013-14) from a year ago, mainly driven by fall in export of government services.

On a monthly basis, export of services witnessed a decline of over 29pc in June 2014 over the same month last year. In absolute terms, export of services fell to $5.256 billion in July-June 2013-14 as against $6.732bn over the corresponding period of last year, showed data compiled by Pakistan Bureau of Statistics (PBS).

Annual export of services reached $6.732bn in July-June 2012-13 as compared to $5.035bn in the corresponding period of previous year.

The services sector has emerged as main driver of economic growth, and its share increased from 56pc of the GDP in 2005-06 to 57.7pc in 2013-14.

Major sub-sectors are finance and insurance, transport and storage, wholesale and retail trade, public administration and defence.

Pakistan has opened up its market to foreign service providers, particularly in banking, insurance, telecommunications and retail.

Import of services dropped to $7.795bn in July-June 2014 from $8.205bn over the previous year, reflecting a decline of 4.99pc.

Services import, which witnessed decrease included transportation, travel, communications, insurance services, financial services, computer and information services and other business services during the months under review over last year.

As a result of decline in exports, trade deficit in services also increased by 72.44pc to $2.539bn in July-June 2014 from $1.472bn in the previous year.

Pakistan’s share in global trade in services stood at less than 0.06pc in 2013, while its share in the domestic GDP posted a substantial increase.

Experts say low share of Pakistan’s trade in services in global trade is because most services available are non-tradable. They 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.

Published in Dawn, August 20th, 2014