Remittances climb to $11.4bn since July

Dawn

KARACHI: Remittances being sent by overseas Pakistanis are on the uptick as the first seven months of the fiscal year have seen an inflow of $11.4 billion, the State Bank of Pakistan reported on Monday, although the month of January saw a small downtick from December.

The report said remittances saw growth of 3.55 per cent compared to the same period of last fiscal year. The growth declined by 1.45pc in the same period last year.

Inflows from United States, United Kingdom and European Union countries increased significantly.

The data showed highest growth in remittances from UK while the biggest decline was from Saudi Arabia. Workers in the Kingdom are still the biggest suppliers of remittances but their contribution has been declining for the last couple of years. It was down by 8pc in first seven months of this fiscal year and fell by 5.6pc in the same period of FY17.

The major changes were noted in the remittances from US and UK as the growth in the inflows were 11.6pc and 24pc compared to declines of 8.6pc and 10.3pc respectively in the same period of last fiscal.

Pakistan received $1.585bn from UK and $1.504bn from the US in the reporting period. The growth from EU countries was highest at 41.7pc but the size of remittances was limited to $371m.

Highest remittances were received from Saudi Arabia which was $2.914bn followed by UAE of $2.512bn with a growth of 2.1pc. The remittances from GCC countries fell by 2pc to $1.314bn.

During January 2018, the inflow of remittances amounted to $1.638bn, which was 4.92pc lower than December 2017 and 10.1pc higher than January 2017.

Pakistan relies critically on remittances and exports to plug the mounting trade deficit. Both have shown an increase in the first seven months of the fiscal year, though in both cases the growing trend appears to be flattening out in January data. The government data showed the country’s trade deficit for the first seven months of FY18 has widened by 24.2pc to $21.546bn.

Last year remittances declined by 3.08pc to $19.303bn, after years of continuous increases. The decline was worrisome for policy makers at a time when the foreign exchange reserves were also declining at an accelerating clip.