Monday, January 6, 2020

Service industry’s role in the economy of Pakistan

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Service industry’s role in the economy of Pakistan


Services sector is largest and fastest growing sector in the world economy, accounting largest share in total output and employment in most developed countries.
The share of services sector in total GDP is 47 percent in low income countries, 53 percent in middle income countries and 73 percent in high income countries.
In case of Pakistan, the shares of services are increasing in all sectors of economy over the period.
In fact, the growth rate of services sector is higher than the growth rate of agriculture and industrial sector.
Services sector accounts for 54 percent of GDP and little over one-third of total employment. Services.

Main Body

The service sector contributes in all segments of the economy. But in recent times, technological advancement in human capital has been reflected expansion in services sector which has taken a tremendous turnabout in the growth trajectory of many developing economies.

Ø  With increasing complexity of modern industrial organization, manufacturing activities have become more and more service intensive, both upstream (e.g. design, research and development) and downstream (e.g. Marketing and advertising). Competitive advantages of a firm depends more on providing specialized service like financing and after-sales facilities than in production, which has increasingly become routinized. Even within the services sector intra services dependence has given rise to health catch-up phenomena.
Ø  The contribution of services has been increasing in the cross boarder trade and foreign direct investment that provides exports opportunities and lower-cost imports.
Ø Under the General Agreement on Trade in Services (GATS), the WTO (1999) aims at liberalizing trade in services among its member countries. Trade in services has been defined in term of the following four modes covered in the GATS.
Ø sector has strong linkages with other sectors of economy; it provides essential inputs to agriculture sector and manufacturing sector.
The objective of this article is to analyses the importance of services sector in an economy and better understanding about Pakistan services sector.
The study also explores the relative performance of services sector and its contribution in the economic growth, trade and employment generation sector has strong linkages with other sectors of economy; it provides essential inputs to agriculture sector and manufacturing sector.
The objective of this paper.

In Pakistan we see that the of shares of services sectors increasing time by time in services economy .and the growth rate of service sector is higher than the rate of growth of manufacturing sector and also agricultural sectors and the services sectors join the strong points with the sector of economy ,and its provide us the inputs for our agricultural and manufacturing  sectors to make it strong.
the services sectors give the good amount of employment in our country. the services sectors not only give the country the job opportunity but it also give the taxes to the country which help the countries growth and the services sectors help the Pakistan economy and employment and make the batter performance of the trade and the economy .
Services sectors help for the trade communications, transport  and other sectors and its also provide the financial support to the producers and it not only give the facility to the consumers but it also give the good capital to the producers for the industrial and business work .
the public services sectors also give the facility to the public and they give the shelter to the public and medicines also and the provide the education in the country and they will work with the different organizations of the country to provide the good facilities to the citizen of the country .

The economy based on the services and its increasing the natural resources that having small industrial base , and the services sector also develop the human resource to provide the quality of education to the public for their better growth of country and they give them technical skills  and the service sectors also contribute the major share in the economics of our country and the big sector of our country is agriculture, and the sector help us to in agricultural sectors .
The services industry is very wide in its nature it covers  a large range of activities that add value to business and individuals but the output is not a physical product ,instead this industry enhances, maintain ,repairs shapes and perform different alternatives and altercations to psychical items .
It also covers activities such as transportation , medical services , education , banking , insurance , waste disposal , telecom munications services and other complex activities that are crucial to a society’s proper  functioning.
The services sector also represent the fastest growing rate sector of the economy in global range , and account 69 percent it give us of global output, 35 percent  it provide us globally employment and it nearly  20 percent of global trade of our country.
The value of the services in the whole world exports has increased by 41.7 percentage , whereas the value of all the goods has increased by 35.5 percent during 1975 to 2005.


The services sector has provided steady support to Pakistan’s economic growth. It share in GDP now stands a more than 50 percent. The paper analyses its continuation in the growth of the economy in general and the development of trade and generation of employment in particular. The study identifies the bottlenecks in its growth and suggest measures to remove them.
A set of policy the service sector is the very important role of Pakistan reforms has been suggested to make the sector more effective in the growth of the national economy.


Students of BBA 2K19 batch, Shaheed Benazir Bhutto University, Shaheed Benazirabad

  • Ayesha 
  • Khalida
  • Usman 

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