Macroeconomic Forecast Pakistan

Pakistan's trade deficit narrowed in October to US$1.1bn from US$1.6bn in the previous month. Export growth ticked up to 7.9% y-o-y (from 6.1%), with earnings coming in at US$2.0bn, up from US$1.9bn in September. Meanwhile, import growth slowed to 19.5% y-o-y (from 45.7%) as the import bill shrunk to US$3.1bn from US$3.5bn. The cumulative deficit through the first four months of the current fiscal year stands at US$5.3bn, 39.9% wider than in the same period in FY2010/11 (July-June). The latest trade readings pose upside risk on our end-FY2011/12 deficit forecast of US$12.3bn.

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