Remittances increase 12.22pc to $12.774bn

Business Recorder

KARACHI: Remittances witnessed a healthy growth of 12.22 percent (YoY) in first seven months of this fiscal year (FY19).

Overseas Pakistani workers remitted $12.774 billion in July-Jan of FY19 as compared with $11.383 billion received during the same period in the preceding year (FY18), depicting an increase of $1.391 billion, the State Bank of Pakistan (SBP) reported on Monday.

The increase in remittances was more pronounced from the non-GCC corridors, especially the US and the UK mainly due to improving macroeconomic conditions and surge seasonal inflows. The increasing economic activity in the developed economies may have incentivised the Pakistani Diaspora in these countries to remit more to their families.

However, during the period under review, remittances from the GCC and EU countries were declined by 7 percent and 4.19 percent respectively. Remittances from Saudi Arabia (KSA) posted a slight growth of 2 percent to $2.972 billion.

Home remittance from the US increased by 33.25 percent to $2 billion in Jan-July of current fiscal year compared to $1.5 billion in same period of last fiscal year. Inflows from UK posted a growth of 22.51 percent to $1.94 billion.

Still, the SBP’s estimates for overall foreign exchange earnings are on the higher side, as workers’ remittances are projected to sustain a high growth. The months falling before Eid-ul-Azha usually witness an uptick in inflows, as expatriates remit funds back home for buying sacrificial animals.

Month on Month basis, during January 2019, the inflow of workers’ remittances were amounted to $1.743 billion, which is 0.3 percent lower than December 2018 and 6.4 percent higher than January 2018.

The country wise details for the month of January 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $403.92 million, $352.12 million, $272.32 million, $295.13 million, $166.50 million and $42.89 million respectively compared with the inflow of $383.91 million, $351.58 million, $223.94 million, $235.10 million, $186.33 million and $56.4 million respectively in January 2018.

Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during January 2019 amounted to $210.36 million together as against $201.46 million received in January 2018.

Economists said that the government is making efforts to increase the inflows of workers’ remittances as it remains a key source of financing of Pakistan’s persistent trade deficit. Therefore, the government remains committed to supporting the flow of remittances into the country and various measures have been taken by the government and SBP to support the inflow of remittances into Pakistan.