Raza Khan

Pakistan missed the target of services exports by 27% during the fiscal year 2022-23, according to the Ministry of Commerce. Pakistan’s services exports were registered at $7.299 billion (provisional data) during the last fiscal year compared to $7.102 billion during FY22, with a slight growth of 2.77%. Services exports declined by 14% during June this year and were recorded at $571 million against $664 million during the same month of last year.

The government had set a services exports target of$10 billion for FY23, which could not be achieved. According to data, the information technology (IT) sector has the major contribution among services exports during FY23, with an export volume of $2.605 billion against $2.619 billion during FY22, with a marginal decline of 0.53%. A target of $5 billion was set for IT exports for FY23.However, it was missed as well by quite a margin.

Source: Ministry of Commerce

Tufail Ahmed Khan, Chief Executive Officer (CEO) of Pakistan Freelancers Association (PAFLA), said while talking to WealthPK that IT exports could not get momentum at any stage during the last fiscal year. He was of the view that the government was relying too much on IT exports while other services sectors were being overlooked. “The government should also focus on travel, transport, insurance, financial services and intellectual property sectors,” Tufail said. He called upon the government to bring policy reforms to boost services exports, especially IT exports. He added that hundreds of freelancers are not bringing back their money from abroad due to complex banking transfers and taxation.

According to the Ministry of Commerce, exports of business services were registered at $1.557 billion during FY23 against $1.690 billion during FY22, with a decrease of 7.86%. Exports of government goods and services managed to register a slight growth of 2.89% during the last fiscal year and were recorded at $1.102 billion against $1.071 billion during FY22. With a substantial growth of 74.72%, exports of travel sector rose to $942 million during FY23 from $542 million during the preceding fiscal year. Exports of transport sector were recorded at $893 million during the year under review compared to $814 million during the preceding fiscal year, registering an increase of 9.70%. Exports of financial services, insurance and pension services and the construction sector were recorded at $61 million, $61 million and $36 million during the year under review.

Pakistan’s services imports were recorded at $8.019 billion during FY23 against $12.942 billion during FY22, with a decline of 61.39%. According to data, Pakistan’s trade deficit in services was reduced by 87.67% during the last fiscal year. Pakistan’s trade deficit in services remained $720 million during FY23 compared to $5.84 billion during FY22. The country’s services exports declined by 14% during June 2023 to $571 million from $664 million during the same month of the last fiscal year. Exports of IT, business services, government goods and services, transport, and travel sectors were recorded at $236 million, $122 million, $116 million, $71 million, and $17 million, respectively, during June 2023.

Credit: INP-WealthPk