Macroeconomic Forecast Pakistan

Pakistan's trade deficit narrowed in November to US$1.1bn from US$1.2bn in the previous month. Export growth edged lower to -0.2% y-o-y (from 9.1%), with earnings coming in at US$1.9bn, down from US$2.0bn in October. However, import growth also slowed to 6.5% y-o-y (from 22.2%) as the import bill shrunk to US$3.0bn from US$3.2bn. The cumulative deficit through the first five months of the current fiscal year stands at US$6.4bn, 38.0% 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$13.8bn.

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