Macro: BoP surplus in FY14; privatization key theme ahead As per recent data released by State Bank of Pakistan, current account posted only US$89mn deficit in Jun-14, taking CAD in 4QFY14 to only US$332mn, lowest in FY14. Financial account, with a whopping surplus of US$4.2bn, further supported balance of payments in 4Q. Cumulatively in FY14, CAD increased to US$2.9bn (1.2% of GDP) compared to US$2.5bn (1.1% of GDP) in FY13 on the back of imports growth (4% YoY) outpacing growth in exports (1.5% YoY). We raise our FY15E CAD estimate slightly to US$2.4bn from US$2.1bn, adjusting for post-budget estimates and higher than anticipated trade deficit in FY14. Expected financial account inflows from privatization, however, offer upside; where against our conservative assumption of US$1.0bn, the govt has resolved to complete six more transactions in FY15 targeting US$1.75bn.
Posted on: Tue, 22 Jul 2014 08:33:36 +0000
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