ISLAMABAD: The services sector performance, especially the transport and telecommunication sectors, has witnessed a positive trends during the first half of the current fiscal year (2015-16), according to second quarterly report of the State Bank of Pakistan (SBP).
“While it is too early to make a robust assessment of services sector performance for the full year, most of the indicators suggestive a positive trend,” said the SBP report.
Production and sales of commercial vehicles has registered a phenomenal growth during first half of the current fiscal year, on the back of the Apna Rozgar scheme launched by the Punjab government, and up tick in overall commercial activity in the country.
According to the report, the transport sector performance included a sharp increase in petrol sale, an increase in cargo handling at domestic ports and most importantly a drastic containment of losses borne by Pakistan Railways and Pakistan International Airlines.
Low oil prices and stable exchange rate have indeed played an important role in improving financial health of these public sector entities. Pakistan Railways has also gained from growing volumes of both freight as well as passenger transport.
In case of telecommunication sector, the report added, the role of increased usage of 3G/4G broadband services all across the country has been dominating, adding that the financial health of most telecom firms has improved, benefiting primarily from data revenues.
According to the report, cellular firms have also partnered with leading commercial banks in the country to support the penetration of Internet banking services. These firms also are actively participating in money transfer services all across the country. The reports said that the telecom sector is now playing a dominant role in modernising the country’s payment system infrastructure, and is also contributing to the wider objective of enhancing financial including in the country for marginalised or unbanked segments of the society.
PTCL, the market leader, has continued to incur losses during first half, however, it has been able to reduce its losses compared to the same period of last year.
The financial and insurance sub-sector had recorded 6.1 percent growth during FY15, which was mainly driven by exceptional increase in profitability of commercial banks. These profits further increased during the first half of current fiscal year, however, its space remains significantly lower than the last year. The general government services had registered 9.5 percent growth against the annual target of 4.3 percent of FY15. This year, the sub-sector also is expected to end up registering a modest growth.
The wholesale and retail trade is likely to benefit from higher large manufacturing growth in first help compared to the same period of last year. The continuous increase in imports (especially non-oil) and domestic demand is also likely to keep trading margins intact while expectations of a bumper wheat crop on the back of strong yields will also benefit the wholesale and retail sectors.