Pakistan’s services sector delivered a positive signal for the external account in November, as the country’s trade deficit in services narrowed significantly, supported by strong export growth and easing import pressure.
According to the latest data released by the State Bank of Pakistan (SBP), the services trade deficit stood at $140 million in November, marking a 41.18% month-on-month (MoM) decline compared to a deficit of $238 million in October.
On a year-on-year basis, the deficit also improved slightly, compared to $150 million recorded in the same period last year, highlighting gradual stabilization in Pakistan’s services trade balance.
Services Exports Rise on Strong IT and Business Services Performance
The improvement in the trade gap was largely driven by robust growth in services exports.
SBP data shows that services exports reached $813 million in November, posting a 21.89% year-on-year (YoY) increase compared to $667 million in November 2024. On a monthly basis, exports edged up 0.25% MoM, reflecting steady demand despite global economic uncertainty.
During the first five months of FY26 (5MFY26), cumulative services exports climbed to $3.832 billion, registering a 16.69% YoY increase from $3.284 billion in the same period of FY25.
IT, Telecom and Business Services Lead Export Growth
A closer look at the data highlights the dominance of IT-related services in Pakistan’s export basket.
• Telecommunications, Computer and Information Services emerged as the largest contributor, generating $356 million in November, up 14.47% YoY.
• Other Business Services ranked second, bringing in $173 million, while recording a strong 37.3% YoY growth compared to $126 million in the same period last year.
• On a monthly basis, exports of other business services also rose 2.37% MoM, underlining consistent momentum.
Meanwhile, transport services exports contributed $88 million, while travel services added $80 million during the review month.
Services Imports Ease on a Monthly Basis
On the import side, Pakistan’s services imports totaled $953 million in November, reflecting a 16.65% YoY increase compared to $817 million in the same period last year.
However, on a month-on-month basis, imports declined sharply from $1.049 billion in October, helping reduce the overall services trade deficit.
Cumulatively, services imports during 5MFY26 stood at $5.148 billion, up 12.8% YoY compared to the same period of FY25.
Transport and Travel Remain Key Import Drivers
Among services imports, transport services accounted for the largest share, costing the country $374 million in November, up 11.39% YoY and 6.02% MoM.
Travel services imports followed at $264 million, recording a 15.94% YoY increase, although they declined 6.98% MoM, indicating some seasonal or demand-side easing.
What This Means for Pakistan’s Economy
The sharp reduction in the services trade deficit signals growing strength in Pakistan’s IT, telecom and business services sectors, which continue to play a critical role in supporting foreign exchange inflows.
If export momentum is sustained and import growth remains controlled, the services sector could become a key stabilizer for Pakistan’s external account, especially amid pressures from goods trade and global economic headwinds.