Pakistan posted a Current Account Surplus (CAS) of only US$18mn in April 2023 against a surplus of US$750mn in March 2023, the numbers are lower than market expectations.

Tighter monetary and fiscal policy and administrative steps taken by the government have led to a shrinking trade balance. CAD for 10MFY23 clocked in at US$3,258mn against a CAD of US$13,654mn in 10MFY22.

The balance of Trade in Goods and Services improved considerably and clocked in at US$1,776mn in April 2023 against a Balance in Trade of Goods and Services of US$3,253mn in April 2022. On an MoM basis, the Balance of Trade in Goods and Services worsened on the back of higher import payments and was US$1,578mn in March 2023.

Workers’ remittances clocked in at US$2,211 in April 2023 against US$3,123mn in April 2022. Remittances have reduced by 29% YoY. The trend in remittances is improving after the 10-15% gap between official and unofficial rates of the local currency has been eliminated.

The current Account Surplus remained lower on the back of higher-than-expected import payments. Pakistan Bureau of Statistics reported a Trade deficit of US$829mn while SBP has reported a trade deficit number of US$1,595mn. The major difference in reported numbers is for imports where PBS reported imports of US$2,953mn while SBP has reported a number of US$3,707mn.

Courtesy- Topline Securities