Remittanceshit record high of $16.6bln in 11 months

KARACHI: Inflows of remittances during the first eleven months of the current fiscal 2014/15 nearly reached the whole year’s target of $16.7 billion, counterbalancing the fall in exports.
The State Bank of Pakistan’s (SBP) data showed on Wednesday that remittances sent home by Pakistani expats working abroad surged 16 percent to an all-time high of $16.632 billion in July-May 2014/15 compared with $14.338 billion in July-May 2013/14.
Analysts said the impact of Ramazan factor will also reflect on the volume of the remittances. Pakistani expatriates usually send more cash to their relatives and families for Umrah and Eid spending.
The SBP data showed that the inflow of worker’s remittances amounted to $1.663 billion in May 2015, which is 15.46 percent higher than the corresponding month of last year.
Analysts said remittances continue to be the most important source of foreign exchange for Pakistan after exports of manufactured goods.
Remittances provide enough foreign exchange to finance almost 80 percent of Pakistan’s imports. It is a lifeline for the poor people.
“Rising remittances have offset the trade deficit, counterbalanced the decline in exports and are major contributor to the improving country’s current account balance,” an analyst said.
“A continuation of the recent uptick will help the country to jack up GDP growth and further bolster its foreign reserve position.” The rise in remittances from Saudi Arabia has been particularly strong. Pakistani migrants, working in the country, sent $528.34 million in May 2015 as against $451.14 million in May 2014.
Remittances from UAE stood at $399.35 million in May 2015 compared with $290.91 million in May 2014.
Remittances from the United States stood at $221.1 million as against $216.84 million in May last year.
Analysts attributed the growth in the inflow of remittances largely to increase in workers’ migration.
There are about seven million registered overseas Pakistanis working in the Middle East, Gulf Cooperation Council states, USA, UK and Europe.
They said Pakistan Remittance Initiative scheme, launched to encourage money transfer from banking channels, is also bearing the fruits.
They added that the banks are aggressively expanding their networks in Saudi Arabia, UAE, USA and Europe.
Malik Bostan, chairman of Forex Association of Pakistan said the SBP has allowed the exchange firms to make agreements with 10 international money transfer companies for the handling of remittances.
“It will encourage (transfer of money through) official sources and push up remittances flows to $20 billion in the upcoming fiscal year,” Bostan said. “Exchange companies make remittances transactions worth $4-5 billion/year.”