Pakistan’s services sector recorded a significantly wider trade deficit of $370 million in December 2025, reflecting a sharp month-on-month deterioration driven by a surge in imports, according to the latest data released by the State Bank of Pakistan. The deficit increased more than twofold compared to $168 million recorded in November, highlighting mounting pressure on the services account despite robust export growth.
On a year-on-year basis, the services trade deficit also widened when compared to a deficit of $250 million recorded in the same period last year. The data indicates that while services exports have continued to post healthy gains, import growth has outpaced export momentum, resulting in a deeper imbalance.
Exports of services rose to $936 million in December, registering a year-on-year increase of 15.99 percent compared to $807 million in December 2025. On a sequential basis, services exports increased by 16.13 percent compared to November, reflecting sustained demand across key export segments.
Cumulatively, during the first half of fiscal year 2025-26, services exports reached $4.765 billion, marking a growth of 16.48 percent compared to $4.091 billion recorded in the corresponding period of last year. This steady expansion underscores the growing role of services in Pakistan’s export mix, particularly in technology-driven segments.
Telecommunications, computer, and information services remained the largest contributor to services exports during December, generating $437 million in receipts. This segment recorded a strong year-on-year growth of 25.57 percent, reflecting continued expansion in IT-enabled services, software development, and digital exports. The performance of this segment has remained a key bright spot for Pakistan’s external sector amid broader trade challenges.
Other business services emerged as the second-largest contributor, bringing in $198 million during the month. Receipts from this category increased by 28.57 percent year-on-year compared to $154 million in the same period last year. On a month-on-month basis, exports of other business services rose by 15.12 percent from $172 million in November, indicating sustained momentum across professional and corporate service offerings.
Exports of transport and travel services also contributed to overall receipts, amounting to $88 million and $108 million, respectively, during December. While these segments remain smaller compared to IT and business services, they continue to provide incremental support to export growth.
On the import side, services imports rose sharply to $1.306 billion during December, reflecting an increase of 23.56 percent year-on-year compared to $1.057 billion in the same period last year. Month-on-month, imports climbed significantly from $974 million recorded in November, underscoring rising outflows across key service categories.
During the first half of FY26, cumulative services imports stood at $6.503 billion, up by 15.69 percent compared to the corresponding period of last year. This sustained rise in imports continues to exert pressure on the services balance, offsetting gains achieved through export growth.
Transport services accounted for the largest share of services imports in December, with expenditures amounting to $462 million. This category recorded a year-on-year decline of 10.2 percent, offering some relief to the import bill. In contrast, travel services imports surged to $373 million, reflecting a sharp increase of 68.75 percent year-on-year and 36.71 percent month-on-month, emerging as a major driver behind the widening deficit.
The latest SBP data highlights a mixed picture for Pakistan’s services sector, with strong export growth led by IT and business services, but rising import costs continuing to widen the trade gap. Analysts note that sustaining export momentum while managing import growth will remain critical for improving the services balance in the coming months.
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