Pakistan Economy_Current Account Surplus, but at a cost (AKD Daily, May 17, 2023)
AKD Daily
Pakistan Economy: Current Account Surplus, but at a cost
- Pakistan posted a Current Account Surplus for the month of Apr’23 to the tune of US$18mn, compared to the revised US$750mn reported for the earlier month. The reduction in the Current Account Surplus for the month is largely attributable to the fall in remittances during the month, which clocked in at US$2.2bn in Apr’23, lower by 12.8%MoM.
- The situation was worsened by an increase in the Trade Deficit, from US$1.6bn in the earlier month to US$1.8bn in Apr’23. This was largely driven by a US$450mn sequential drop in exports, offset by a US$252mn drop in imports of Goods & Services.
- Foreign Direct Investment in the country has dropped to US$121.6mn in Apr’23, compared to US$163.4mn in the earlier month and US$170.6mn in the SPLY. A large chunk of FDI during the month was attracted from China, to the tune of US$28.5mn, higher by 1.3xMoM.
- Current Account Surplus in the last two months has come at a cost to the country, as imports of essential raw materials have been curbed. Industrial output of the country has been negatively affected. Opening up of the economy could lead to further weakness in the PkR. Hence, we continue to advocate for US$-denominated sectors, i.e. Technology and E&Ps.
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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