JS Securities Limited - Morning Briefing.

Karachi -- November 16, 2018 (PPI-OT)

Remittances soften pickup in imports in Oct-2018

CAD increased by 34% MoM during Oct-2018, amounting to 5.0% of GDP.

Imports grew by 24% MoM, pushing up the trade deficit by 33% MoM; however, welcome relief came by way of 38% MoM growth in remittances.

While inflows are in the pipeline (fingers crossed), these quick fixes are by no means a substitute for structural reforms.

CAD rose by 34% MoM during Oct-2018

Current Account Deficit (CAD) increased 34% MoM in Oct-2018 to US$1,218mn, or -5.0% of GDP, compared to US$909mn (-3.5% of GDP) in Sep-2018. Growth in CAD was mainly attributable to a 33% MoM jump in trade deficit, which grew to US$2,654mn, where a 24% MoM rise in imports overshadowed a 15% MoM improvement in exports. The sharp decline in the PKR against US$ has not reflected in this month's import number via a reduction, or even a stagnation in imports, compared to 19% MoM and 15% MoM declines in imports in Aug-2018 and Sep-2018, respectively. In fact, imports have grown at the highest pace in the preceding twelve months in the latest reading. Relief to the overall current account...