Remittances clock in at $18bn

Dawn

 

KARACHI: The country received $18 billion in remittances from overseas Pakistani workers during the 11 months of FY18.

Despite a 10 per cent decline in remittances from Saudi Arabia, Pakistan’s overall inflows noted a growth of about 3pc over the same period of last year.

The continuing drop from Saudi Arabia is a source of concern as it’s still the biggest source of remittances. Inflows from the kingdom fell to $4.522 billion during July-May FY18 from $5.031bn in the same period of 2016-17.

Thousands of Pakistanis have lost jobs since Saudi Arabia began its drive to replace overseas workers with locals.

Moreover, the imposition of taxes on resident families in the kingdom has prompted thousands of workers to return home.

However, overall remittances from Middle East remained positive with a slight decline from Gulf Cooperation Council (GCC) countries.

Inflows from UAE improved by 2pc to $3.992bn during the 11 months of 2017-18 while remittances from GCC countries fell by 4.6pc to $1.994bn in the same period.

An improvement was noted from Britain as remittances rose by 20.5pc to $2.517bn during the period under review.

The country has emerged as the third largest source of inflows for Pakistan. Remittances from the United States went up by 13pc to $2.464bn during this period.

Pakistan heavily depends on remittances to meet its trade and current account deficits. This slight improvement, however, does not match with the widening current account deficit which rose to $14bn in the first 10 months of 2017-18.

The $34bn trade deficit has put enormous pressure on the country’s external account which has shaken up the exchange rate and eroded reserves of the State Bank.