Remittances fall 2.45pc to $7.874bln in July-November

KARACHI: The amount of money sent home by Pakistani working overseas dropped 2.45 percent to $7.874 billion in the first five months of the current fiscal year of 2016/17, the central bank said on Friday.

The country received $8.072 billion in the corresponding July-November period of the last fiscal year.   Workers’ remittances, however, increased 3.63 percent to $1.616 billion in November from October 2016 and 3.27 percent higher than November 2015.

The country is heavily dependent on remittances to fund its current account on weaker exports receipts and slowdown in foreign investment. Strong remittances in recent years have helped build foreign exchange reserves to more than $23 billion.

Pakistan has a large number of citizens who work abroad, but what they have been able to send home has fallen due to an economic slowdown in popular work destinations such as the Middle East.

Analysts said economic slowdown in the region —a major remittance corridor for Pakistan took a toll on immigrants’ earnings. Remittances have dropped over the last few months because the number of Pakistani going to work in the Middle East has also declined.

They added that a steep fall in oil prices pushed many oil-rich Middle Eastern economies to reduce subsidies and cut down overall spending. Tepid economic growth in the developed countries and tightening regulations about international fund transfers and deceleration in the Middle East economy could have negative implications for the remittances inflows in many developing countries, analysts said.

Saudi Arabia had slashed budgetary allocations for infrastructure and transportation by a massive 62.1 percent year-on-year this year. The central bank has projected remittances to reach at $20.5-21.5 billion in the current fiscal year of 2016/17 from $20.2 billion recorded in the last fiscal year.  

Pakistan received $2.259 billion in remittances from Saudi Arabia in the first
five month to November compared to 1.905 billion in the same period a year earlier. The central bank data showed that remittances from United Arab Emirates (UAE) fell three percent to $1.777 billion in July-November period from $1.833 billion in the same period of the last fiscal year.

Remittances, which include those from USA and UK, saw a steep decline during the period under review. Overseas workers residing in the USA sent home $981.37 million, down from $1.060 billion, showing a decline of 10.52 percent over July-November FY16.

Remittances from the UK were contracted 13.97 percent to $912.61 million, from $1.060 billion a year ago. The flow of remittances from other GCC countries inched down to $950.59 million in July-November period against $962.50.04 million in the last year.