KARACHI: Pakistan has received $21.84 billion in remittances sent home by overseas Pakistanis in the fiscal year ended June 30, 2019. The inflows are 3%, or around $640 million, higher than the set target of $21.2 billion for the year.
Moreover, the remittance inflows are around 10% higher than $19.91 billion received in the previous fiscal year 2017-18, the State Bank of Pakistan (SBP) reported on Wednesday.
The country achieved higher remittances due to improved economic activities and higher job opportunities available in the Western countries like US and UK. Moreover, the end of financial crisis in oil producing and exporting Gulf and Middle Eastern countries including Saudi Arabia and UAE due to a notable recovery in oil prices also contributed to the increase as majority of Pakistanis reside in the region, according to central bank’s latest quarterly report on the state of Pakistan’s economy. An official at the remittances department of a state-owned bank said the massive 32% depreciation in local currency to Rs160.05 to the US dollar in the fiscal year just ended led overseas Pakistanis to send higher remittances during the year.
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Moreover, a crackdown against illegal remittance operators – hundi and hawala operators – also prompted Pakistanis to send remittances through proper legal channels, including banks. “This has also helped the government in attracting higher remittances during the year,” he said. He said improvement in Saudi Arabia’s economy due to revival in petroleum prices in the Gulf and Middle East region also helped the kingdom to release backlog of salaries of foreign workers and revise up their pay scales during the year.
“Some 60-65% chunk of the remittances comes in Pakistan from the Gulf and the Middle Eastern countries as majority of the Pakistanis reside in the region for job purposes,” he said.
Inflows at $1.65b in June
During the single month of June 2019, the inflow of workers’ remittances amounted to $1.65 billion, which is around 29% lower than May 2019 but 1.40% higher than June 2018, the central bank reported.
The country-wise details for the month of June 2019 show that inflows from Saudi Arabia amounted to $334 million compared with the inflow of $336.61 million in June 2018.
Pakistanis residing in the UAE sent $356.03 million compared to $345.31 million. The remittances from US amounted to $276.76 million compared to $260.32 million; $268.97 million was sent from UK compared to $260.25 million in the previous year.
Pakistanis from GCC countries (including Bahrain, Kuwait, Qatar and Oman) dispatched $163.46 million in June 2019 compared to $163.53 million in June 2018; while inflows from EU countries stood at $52.49 million compared to $62.16 million. Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during June 2019 amounted to $198.81 million together as against $199.47 million received in June 2018.
Besides the US and UK, inflows from Malaysia also supported overall remittances in the first half of FY19. Malaysia, in particular, is emerging as one of the major sources of remittances and contributed $787 million in the first half of FY19, up 57.2% from last year. “In fact, remittances from Malaysia have been rising persistently since FY13,” the central bank stated.
Published in The Express Tribune, July 11th, 2019.