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January 23, 2021

IT exports surge 40pc to $958mln in first half

Business

January 23, 2021

ISLAMABAD: Pakistan’s information and communication technology exports surged 40 percent to $958 million during the first half of the current fiscal year of 2020/21, although overall services’ exports remained flat, commerce adviser said on Friday.

IT exports stood at $684 million during the same period of the previous fiscal year. Adviser to the Prime Minister on Commerce and Investment Razak Dawood said the information and communication technology exports will soon become a “very important sector in Pakistan’s total exports and I am optimistic that these would cross the $2 billion mark in the current financial year.”

“The trade balance in the services sector has improved significantly during the first six months of the current financial year,” Dawood said during a meeting to discuss global trade in services.

Trade deficit in services improved to $977 million in the July-December period compared to $1.7 billion in the same period a year earlier, showing a 42 percent improvement.

“This will contribute significantly to the improvement of current account deficit,” he said. “Services play an important role in everyday life. They have a central place in both domestic and international economies and account for the bulk of global foreign direct investment and trade. Services connect countries to the international trading system by facilitating supply chains and e-commerce.”

Commerce adviser said new markets have to be found to increase the services’ exports. He advised the Trade Development Authority of Pakistan to focus on export promotion of services. “The market access and export promotion of services has to go hand-in-hand in a synchronised manner.”

However, total export of services stood at $2.844 billion in July-December compared to $2.835 billion during the same period in the previous year. Exports of insurance and pension services grew 21 percent, while exports of financial services increased 26 percent and exports of other business services, including consultancies rose two percent.

Travel and transport services’ exports plunged 28 percent and 18 percent, respectively, during the period under review. The sectors are likely to improve once the pandemic subsides. Import of services declined 15.7 percent to $3.8 billion during the period.

The meeting was told that all over the world workers remittances are included in the export of services as they come under the mode-4 of the World Trade Organization classification of services exports, which are related to the presence of natural persons of a member in the territory of any other member.