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Business

February 13, 2018

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Remittances rise 3.55pc to $11.383bln in July-January

KARACHI: Workers’ remittances increased 3.55 percent to $11.383 billion during the first seven months of the current fiscal year (July-January), while on month-on-month basis, it fell 4.93 percent to $1.638 billion in January from the previous month, the central bank data showed on Monday.

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The rise in remittances can be attributed to continuous surge in inflows from the non Gulf Corporation Council (GCC) countries. Workers living abroad sent $11.383 billion during July-January FY18, mostly from the UK, US and EU countries.

“Increase in remittance flows from non-GCC states offset the lower remittances from the Middle East countries and we don’t see any major change in remittance volume during the FY18,” an analyst said.

“However, an appreciation in the US currency against the pound sterling and euro could shrink inflows from the UK and other EU countries." Analysts saidremittances to Pakistan could remain almost flat for the current fiscal year, as labour market conditions are expected to remain sluggish in the GCC region, especially in Saudi Arabia due to slowdown in the construction activities.

Remittances from the United Kingdom jumped to $1.585 billion during the period under review from $1.278 billion a year ago. The country received $1.504 billion in remittances from the United States as compared to $1.347 billion last year.

Expatriates from the European Union countries sent $371.35 million in July-January FY18 as compared to $262.07 million during the same period of the last fiscal year. The US dollar’s depreciation against sterling and the euro has propped up the dollar value of remittances from the UK and other EU countries.

 However, inflows from Saudi Arabia, the largest sender of remittances for Pakistan, dropped eight percent to $2.914 billion. Overseas Pakistani working in the UAE sent $2.512 billion against $2.486 billion in the corresponding period of FY17.

Remittances from other GCC states decreased to $1.314 billion as compared to $1.342 billion last year. Citing reasons for lower remittance inflows from GCC countries, the State Bank of Pakistan in its first quarterly report said that Pakistan mostly exports low-skilled migrants to the Middle East. Over the last two years, over one-thirds of Pakistanis who went abroad for work (mainly to the GCC) and registered with the Bureau of Emigration and Overseas Employment (BEOE), were labourers.

“Demand for these types of low-skilled jobs is often cyclical and depends heavily on initiation of new projects. This, in turn, has reduced the region’s demand for labourers; unsurprisingly, the number of Pakistani labourers going abroad for work has been declining for over a year now, and the trend is likely to continue,” it added.

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