Pakistani diaspora sends $21.841bln remittances back home in FY19

KARACHI: Pakistanis working overseas sent more money home last year than ever before, but the growth in remittances slowed for a second straight year amid sluggish global growth.

The amount of cash sent back to Pakistan rose 9.89 percent to $21.841 billion in the last fiscal year of 2018/19, the State Bank of Pakistan said on Wednesday.

The slow pace of growth, however, still hit the central bank's projected target of $20.5-21.5 billion.

The government in its annual plan targeted workers’ remittances to reach $24 billion during the current fiscal year of 2019/20.

Workers’ remittances stood at $1.650 billion in June, which is 28.72 percent lower than May and 1.40 percent higher than June 2018.

A major chunk of remittances received from the United States of America followed by the United Kingdom.

Remittance flows from the USA stood at $3.409 billion, showing an increase of 20.1 percent over the previous fiscal year. Cash from the UK recorded at $3.411 billion in July-June FY19, up 17.95 percent from the same period of 2017/18.

However, Pakistani expatriates working in Saudi Arabia sent home $5.0 billion, which is only 2.97 percent higher than that remitted in the previous year.

Remittances from the United Arab Emirates depicted a single digit growth of 5.98 percent. The country received $4.619 billion from UAE in FY19 from $4.358 billion in FY18.

Pakistani workers living in the Gulf Cooperation Council countries sent home $2.119 billion, which is 1.82 percent lower than the 12 months of previous year.

Analysts see the growth in remittances to remain in the high single digits in the current fiscal year as economic growth in Saudi Arabia and the Gulf region faces slowdown.

The SBP sees at around $20 billion per year, international remittances are important from the perspective of overall macroeconomic stability and their positive spillover in improving lives of millions of families.

The government and the central bank have taken a number of initiatives to promote the transfer of home remittances using formal financial channels and the new block chain technology based remittance service would complement these efforts as transfer of cross border remittances in near real time would bring convenience and facilitation for both remitters and their beneficiaries.