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January 12, 2020

Remittances rise 3.31pc to $11.394bln in July-Dec

Business

January 12, 2020

KARACHI: Remittances from overseas Pakistani workers increased 3.31 percent to $11.394 billion in the first six months of the current fiscal year of 2019/20, central bank data showed on Saturday.

In December, the inflow of workers’ remittances amounted to $2.097 billion, which were 15.25 percent higher than the previous month and 20 percent higher than December 2018.

The increase in remittances was driven by acceleration in these flows from the United States of America, the United Kingdom followed by the European Union countries.

The inflows from the US and UK stayed healthy despite a global economic slowdown in 2019.

However, inflows remained flat from the main source, such as Middle East due to tight employment conditions in that region. The SBP’s data further showed that Pakistani workers living in Saudi Arabia sent home $2.618 billion in July-December FY20, compared with $2.567 billion sent in the corresponding period of FY19.

Remittances from the United Arab Emirates stood at $2.349 billion in July-December FY20 compared with $2.348 billion last year. Inflows from US increased 9.08 percent to $1.889 billion in the first half of this fiscal from $1.732 billion a year ago. The country attracted $1.753 billion from the UK, compared with $1.647 billion last year. Remittances from the EU countries rose 8.42 percent to $339.24 million.

Pakistani workers living in other Gulf Cooperation Council countries sent home $1.089 billion in remittances, which were 3.17 percent higher when compared to last year.

Analysts said the transfer of funds would expectedly reach $22.5 to 23.5 billion this fiscal year, in line with the central bank’s projection. Remittances stood at $21.8 billion in FY19.

The SBP in its first quarterly report forecast better outlook for remittances, which reflects the ongoing efforts by the Pakistan Remittance Initiative (PRI) and the government to increase transmittal through formal channels into the country.

“For instance, the PRI has aided the Pakistan Post and the National Bank of Pakistan to jointly enhance their tie-ups with 41 money transfer operators in the UAE and Saudi Arabia during the current year,” the central bank’s report said.

“Also, under the ‘foreign remittance initiative’ project, families of Pakistani workers can receive remittances from 240 branches of Pakistan Post for free.”

Other incentives include the exemption from withholding tax on bank accounts fed with remittances, and the reimbursement of marketing charges to exchange companies and banks, it added. It, however, warned that the tepid global growth outlook and commodity prices might weigh on remittances.

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