The overseas Pakistanis’ remittances saw record growth of 12.5 percent over the same period last year as they sent the highest-ever $8 billion sum during the first quarter of the current fiscal year.
On Friday, the State Bank of Pakistan reported that the inflows of $2.7bn in September kept the strong momentum of workers’ remittances as they stayed above $2bn since June 2020.
The SBP said, “This is the 7th consecutive month when inflows recorded around $2.7bn on average.”
In terms of growth, remittances increased by 17pc in September compared to the same month last year, while comparing with August inflows it was 0.5pc higher.
The ever-increasing imports in the first quarter of the fiscal year 2022 widened the trade deficit putting immense pressure on the rupee-dollar exchange rate which ultimately reflected in a higher current account deficit. The situation for the economic managers is not comforting with the exception of the higher remittances that backed the economy beyond imagination.
The country had received record remittances of $29.4bn in FY21 which helped to curtail the afflicted current account deficit.
In a statement, the central bank said, “The proactive policy measures by the government and SBP to incentivize the use of formal channels, curtailed crossborder travel in the face of Covid19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions have positively contributed towards the sustained improvement in remittance inflows since last year.”
Comparison of the Statistics
The highest remittances were received from Saudi Arabia which was almost 25pc (2.025bn) of the total remittances but at the same time, they were 2.6pc less than the same period of last year. During July-September 2021-22 the remittances from Saudi Arabia were $2.025bn against $2.080bn last year. In September, Pakistan received $691m from the kingdom against $694m in the same month of last year.
The remittance from the United Arab Emirates was second highest as it witnessed a growth of 8.7pc while it amounted to $1.545bn during the first quarter of FY22.
The inflows from UK and USA noted a growth of 13.2pc and 32pc amounting to $1.115bn and $836m respectively. The growth in the first quarter of FY21 was 71.5pc for UK and 63pc for the USA.
For the first time, the inflows from EU countries surpassed the total inflows from that of the Gulf Cooperation Council countries. The inflows from EU countries rose $889m compared to $880.7 from the GCC countries. The remittances from the countries of the European Union saw a surge of 47.8pc compared to the same period of last fiscal year.
The deterioration of the exchange rate has surfaced crucial problems for external trade activities. Recently, the SBP has taken several measures to curtail the outflow of dollars and reduce the import bill but the exchange rate is still against the rupee which has lost about 11.5pc during the last five months.