Aprils trade gap numbers are a sign of relief. So is the workers remittance data.
The figures released yesterday by Federal Bureau of Statistics and State bank of Pakistan respectively show that recovery is indeed taking place; at least so far.
FBS data show that exports rose 31 percent in April year-on-year - outpacing imports which edged just 7.7 percent higher.
Even month-on-month numbers are promising, despite a slight fall in exports. Overseas sales in April eased by nearly 3.88 percent compared to March - much lower than 8.26 percent drop in imports.
But this is all in a soft oil scenario. So far global oil prices have been, by and large, tame, thanks to Greece debt woes that brought prices lower as soon as the crude bull neared $88 a barrel.
Now, following the $1 trillion shock and awe package to stabilise the European Union, the black gold might move back on its northward trajectory. Though, forecasting oil isn exact business, certain quarters see its price averaging $85~88 per barrel by the end of the year.
Thankfully, however, current account imbalance might continue to be cushioned by remittances. According to SBPs data, money sent home by Pakistani workers abroad rose by nearly 15 percent to $7.3 billion in the first ten months of current fiscal year.
According to FBS figures, the average quarterly gap between imports and exports has started widening again, after bottoming out in the first quarter of the fiscal year 2010.
So, if the rising trend in remittances continues then Pakistan may still be able to mitigate the impact of an increasing trade gap. Else, things could turn thorny.
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