Remittances rise 10pc to $10.7bln in first half of FY19

KARACHI: The amount of money sent by Pakistani workers living abroad increased 10 percent in the first half of the fiscal year 2018/19, the State Bank of Pakistan (SBP) date showed on Thursday.

Remittances touched $10.718 billion in July-December FY19, compared with $9.744 billion in the corresponding period last year. In December, the figure was $1.690 billion. That was 5.07 percent higher than November 2018 but 1.93 percent lower than December 2017.

Workers’ remittances are growing at a high double-digit pace since the start of current fiscal year in July 2018. However, a very nominal increase in flows from Saudi Arabia and a persistent reduction in money transfers from the Gulf Cooperation Council (GCC) and the European Union countries have slow down growth in the first six months of the current fiscal year.

The country received higher inflows from the USA and the UK as the Pakistani expatriates from these countries sent home $1.655 billion and $1.533 billion, translating higher growths of 29.30 percent and 13.57 percent, respectively in July-December period.

Remittances from Saudi Arabia rose slightly 1.46 percent to $2.567 billion. Pakistani workers living in the UAE sent back $2.292 billion, compared with $2.160 billion a year ago.

The country received $1.047 billion in remittances from other GCC countries, compared with $1.128 billion in the same period last year.

Remittances and exports help countries close balance of payments gaps. These flows give the governments fiscal space to invest in infrastructure and public institutions. In short, the economic activity can be fostered by using remittances.

Governor State Bank of Pakistan Tariq Bajwa has recently said at least $20 billion worth of remittances are necessary to maintain the macroeconomic stability and their positive spillover in improving lives of millions of families.

Home remittances contributed to over 6 percent in GDP, equivalent to over 50 percent of our trade deficit, 85 percent of exports and over one-third of imports during fiscal year 2017-18.

Over the past 10 years, remittances have grown at a compound annual growth rate (CAGR) of over 12 percent – one of the highest growth rates for any country in the world.