Remittances continued their exceptional streak in May 2021, remaining above $2 billion for a record 12th straight month.
Remittances received during May 2021 amounted to $2.5 billion, 33.5 per cent higher than the same month last year. These were also higher than the monthly average of $2.4 billion during July-April FY21.
On a month-on-month basis, workers’ remittances fell by 10.4 per cent in May 2021 compared to April 2021. This fall was expected as remittances usually slow in the post-Eid-ul-Fitr period. As Eid fell in mid-May 2021 with markets closed a week earlier, there was some front-loading of remittances in April 2021. However, the seasonal decline in May 2021 was less the half the average decline observed during FY2016-2019. In FY2020, remittances experienced an exceptional rise due to the easing of covid lockdowns in the post-Eid period in Gulf countries.
On a cumulative basis, remittances surged to $26.7 billion during July – May FY21, higher by 29.4 per cent over the same period last year. Remittances during the first eleven months of FY21 have already crossed the full FY20 level by $3.6 billion.
Remittance inflows during July-May FY21 were mainly sourced from Saudi Arabia ($7.0 billion), United Arab Emirates ($5.6 billion), United Kingdom ($3.7 billion) and the United States ($2.5 billion).
Record high inflows of workers’ remittances during FY21 have been driven by proactive policy measures by the government and SBP to incentivize the use of formal channels, curtailed cross-border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions.