Remittances fall to $10.946bln in seven months

KARACHI: Remittances sent by Pakistanis living aboard inched down 1.87 percent to $10.946 billion in the seven months of the current fiscal year of 2016/17, the central bank’s data showed on Friday.

Figures published by the State Bank of Pakistan (SBP) revealed that workers’ remittances stood at $11.154 billion during the same period of the last fiscal year. Analysts said many Pakistani workers living in the Gulf region are witnessing income reduction and job layoffs due to economic contraction in the region.

Besides, tougher anti-money laundering laws for global corresponding, banks are also discouraging remittances flows to Pakistan in line with the trend in other South Asian countries.    Pakistanis sent home $1.487 billion in January 2017 against $1.466 billion in the corresponding month of the last fiscal year.

The continuous dip in remittances, along with slowdown in exports, is a source of concern for the economic policymakers.    The SBP has also cautioned that risks to the balance of payments would continue if the financial inflows would not grow further.

The central bank sees remittances reaching more than $20 billion in FY17. The country received $20 billion worth of remittances in FY16.  Pakistan’s performance on the external front has not been encouraging.

The frequent drop in foreign currency reserves, the lack of growth in remittances, and worsening trade deficit have been putting pressure on the balance of payments.   The foreign exchange reserves held by the country fell to $22.031 billion as of February 3, 2017 against $22.434 billion a week earlier.

Pakistan received $3.169 billion in remittances from Saudi Arabia in July-January FY17, compared with $3.358 billion a year earlier. The data showed that remittances from United Arab Emirates amounted to $2.440 billion, against $2.486 billion in July-January FY16.   Remittances received from the United States came in at $1.338 billion as compared to  $1.473 billion a year ago.