After four consecutive months of Current Account Deficit (CAD), Pakistan recorded a Current Account Surplus (CAS) of US$9mn in Nov 2023. Tighter monetary and fiscal policy along with administrative steps taken by the government have led to a shrinking trade balance. CAD for 5MFY24 clocked in at US$1,160mn against a CAD of US$3,264mn in 5MFY23.

To highlight, the Pakistan Bureau of Statistics (PBS) reported a Goods Trade deficit of US$1.9bn, while the State Bank of Pakistan (SBP) stated a trade deficit of US$1.7bn for Nov 2023. The major difference in reported numbers is for exports where PBS reported exports of US$2.73bn while SBP has reported a number of US$2.57bn in Nov 2023.

As per SBP, export for Nov 2023 clocked in at US$2.7bn up 22% YoY while down 1% MoM. On the other hand, imports up 3% YoY and 2% MoM to US$4.5bn in Nov 2023. The increase in imports is due to the easing of restrictions at the IMF’s demand.

Balance of Trade in Services also improved and clocked in at US$199mn in Nov 2023 against US$250mn in Oct 2023, down 20% MoM.

Workers remittances clocked in at US$2.3bn in Nov 2023 down 9% MoM compared to US$2.5bn recorded in Oct 2023.

The government expects the CAD to remain in a range of US$4-4.5bn for FY24, while the SBP anticipates that the CAD will be 1-1.5% of GDP (US$3.5-5.5bn). However we believe the CAD to remain at around US$4bn in FY24.

Courtesy – Topline Pakistan Research