December 13, 2018 (MLN): Pakistan’s Current Account deficit (CAD) is expected to improve in FY19, a research report written by Mr. Sharoon Ahmed, research analyst at Elixir Securities, stated today.
According to the research house, CAD in FY19 is expected to be around USD 12bln (4.2% of GDP).
Speaking with Mettis Global News, Mr. Sharoon Ahmed, briefed that the reasons attributable to this forecast include, recent fall in international oil prices and impact of deferred oil facility beginning from January 2019, improvement in exports owing to currency depreciation and incentive by the government in the form of availability of gas on subsidized rate to export oriented sectors.
Moreover, in the month of November’18, CAD is estimated to remain relatively flat at USD 1.23bln compared to USD 1.22 billion in Oct’18, as improvement in trade deficit is expected to be counterweight by 20% MoM decline in remittances.
Meanwhile, on yearly basis, CAD is expected to improve by 14% YoY, primarily led by 11% decline in good’s imports in spite of 12% YoY decline in good’s exports (based on Estimated SBP numbers).
The research report further adds that cumulatively, CAD is expected to down marginally 3% YoY and to total USD 6.07 billion during 5MFY19, mainly due to 13% YoY (USD 208 million) growth in remittances to USD 9.03 billion, despite 2% YoY growth in imports to USD 22.62 billion.
On monthly basis, the data seems encouraging as CAD would likely be maintaining a downward trajectory.
