• Pakistan Bureau of Statistics released Balance of Trade data for May20. Pakistan’s trade deficit shrank by 35% M/M from $2247mn in Apr’20 to $1460 in May’20. On yearly basis, trade deficit fell by 50% from $2,921 in May19 to $1,460 in May’20.
  • Signs of recovery were observed in exports from the April low. They rose by 45% M/M from $957mn in Apr’20 to $1,391 in May’20. On the other hand, imports registered a 11% M/M decline from $3,204mn in Apr’20 to $2,851mn in May’20. On yearly basis, both exports and imports plunged by 34% and 43%, respectively.
  • For the 11MFY20 period, trade deficit dipped by 28% Y/Y from $29,154mn to $20,878. Exports and imports during the same period declined by 6% Y/Y and 19% Y/Y, respectively.
  • Decline in trade deficit can be attributed to global easing of lockdown along with pent up demand for  exports. On the other hand, global declining oil prices are keeping a check on imports.
  • However, capital account needs to be closely monitored for any additional funding needs. As far as current account is concerned so recovery in exports would provide some breather and compensate for potential drop in remittances this month.
  • In the short-term, we believe that currency would remain stable and wouldn’t feel any pressure beyond Rs.165.
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Trade deficit shrinks by 35% M/M and 50% Y/Y to $1,460mn in May’20


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