Pakistan’s services sector posted a trade deficit of $302 million in January 2026, marking a 24.69 percent month-on-month improvement compared to a deficit of $401 million recorded in December, according to the latest figures released by the State Bank of Pakistan. The narrower deficit reflects a moderation in import outflows alongside steady export performance within the services domain.
On a year-on-year basis, the deficit was slightly higher than the $291 million recorded in January last year, indicating that while the monthly position has improved, annual comparisons show continued external sector pressures. The services trade balance remains a critical component of Pakistan’s overall current account, particularly as technology-driven exports and business services expand their share in total foreign exchange earnings.
Exports of services reached $887 million in January, representing a 31.6 percent increase compared to $674 million in the same period last year. The annual growth signals resilience in key segments such as information technology, telecommunications, and business services. However, on a monthly basis, exports declined 6.24 percent compared to December, suggesting some seasonal or cyclical moderation after a strong close to 2025.
Cumulatively, during the first seven months of FY26, services exports stood at $5.662 billion, reflecting an 18.82 percent year-on-year increase from $4.765 billion in the corresponding period of FY25. The steady expansion underscores the growing role of knowledge-based and digitally delivered services in Pakistan’s export mix.
Within the January export breakdown, Telecommunications, Computer, and Information Services emerged as the largest contributor, generating $374 million in receipts. This segment recorded a 19.49 percent year-on-year increase compared to the same period last year, reinforcing its position as a leading foreign exchange earner within the services category. The performance highlights sustained global demand for IT-enabled services and software-related exports.
Other Business Services ranked second, contributing $192 million during the month. Receipts from this segment rose 31.51 percent year-on-year compared to $146 million last year. On a month-on-month basis, however, the category saw a slight 3.03 percent decline from $198 million in December. Transport and Travel services exports amounted to $89 million and $111 million, respectively, during January, adding to the diversified composition of services receipts.
On the import side, total services imports reached $1.189 billion in January, representing a 23.21 percent increase compared to $965 million in the same period last year. Despite the annual rise, imports declined from $1.347 billion recorded in December, contributing to the narrower monthly deficit.
For the cumulative July–January period of FY26, services imports stood at $7.733 billion, up 17.42 percent year-on-year. Among import categories, Transport services accounted for the largest outflow at $482 million in January, up 12.66 percent year-on-year but slightly down 1.11 percent from the previous month. Travel services imports were recorded at approximately $390 million, reflecting increases of 60.87 percent year-on-year and 2.78 percent month-on-month.
The latest data suggests that while Pakistan’s services exports continue to show annual growth momentum, rising import expenditures—particularly in travel and transport—are maintaining pressure on the trade balance. The month-on-month narrowing of the deficit offers short-term relief, but sustained export expansion and controlled import growth will be critical to stabilizing the services account in the months ahead.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.