Remittances rise 24 percent in July 2019

KARACHI: Pakistan’s remittances from overseas workers increased 24 percent to $2.039 billion in the first month of the current fiscal year from $1.645 billion in the previous month, central bank’s data showed on Friday.

However, July remittances were slightly higher than the same period last year, when Pakistani expatriates sent home $1.981 billion. A month-on-month increase in remittance flows reflects economic recovery in source markets and the government’s efforts to encourage overseas Pakistanis to remit through legal means. Moreover, overseas Pakistanis sent home more remittances to their families to buy sacrificial animals ahead of Eidul Azha. The festival of sacrifice is due on Monday.

The State Bank of Pakistan’s (SBP) country specific data revealed that the major inflows came from the Gulf Cooperation Council (GCC) and the non-GCC corridors.

Pakistani workers living in the United States of America sent home $332.37 million in July 2019, or 20 percent above the $276.76 million sent in the previous month. The sharp rise from the US was driven by higher economic activity, increase in wages and low unemployment. Remittances from the United Kingdom rose to $299.27 million in July from $268.98 million in June.

The country fetched $470.95 million from Saudi Arabia in July, compared with $333.99 million in June.

The SBP’s third quarterly report published last month stated that the uncertainty in the UK over Brexit was fuelling labour demand as the firms were cautious on committing for long-term investment in case Britain crashes out of the European Union without any deal. This situation has been powering labour wages in the UK, and leading to higher remittance outflow from the country.

Remittances from the United Arab Emirates increased to $427.33 million from $356.03 million. Pakistani workers living in the GCC countries sent home $198.06 million, compared with $163.46 million sent in the previous month.

The GCC remains the largest source of remittances for Pakistan. The improvement in inflows from the Middle East is attributed to increased government spending in Saudi Arabia. The country attracted $160.36 million from Malaysia. These inflows stood at $113.20 million in June 2019.

Analysts said remittances could keep pace and sustain an upward trend during the current fiscal year. The SBP expects the government’s efforts taken under Pakistan Remittance Initiative (PRI) to support the higher remittance flows in the FY 2020. PRI facilitated local exchange companies to increase their tie-ups with the international money transfer operators.

The central bank also allowed exchange companies to start working directly to attract remittance inflows from countries with nominal share.

However, the recent Middle East government’s move to sack Pakistani doctors with MS (Master of Surgery and MD (Doctor of Medicine) degrees might have some negative impacts on remittances. Remittances to Pakistan rose 9.68 percent to $21.841 billion in the last fiscal year, compared with the previous year.