KARACHI: Remittances from Pakistani labourers working overseas increased 11.3 percent year on year to $15.8 billion in the first six months of current fiscal year, according to central bank figures released on Friday.
According to analysts, remittance flows continued to rise and reached a six-month high in July-December FY2022.
“Remittances to the nation remained robust, supported by government incentives for expats to send money home through legitimate channels and a crackdown on operators of illegal sources like as hundi and hawala,” said Tahir Abbas, research head at Arif Habib Limited.
Due to pandemic bans in various locations, limited flying travel of abroad Pakistanis to the motherland resulted in increased financial transfers through legal means, supporting the surge in remittances, he noted. “Worker remittances reached an all-time high in the first half of this fiscal year, and we expect this trend to continue in the second half.” Remittances are expected to climb by more over $31 billion in FY2022, according to Abbas.
Remittances are one of Pakistan’s most important sources of foreign cash inflows. These substantially fund the country’s trade imbalance, contribute to the buildup of forex reserves, and minimise the government’s external financing requirements.
According to figures from the State Bank of Pakistan (SBP), the majority of inflows came from Saudi Arabia, the United Arab Emirates, the United Kingdom, and the United States.
Saudi remittances increased by 2% to $4.034 billion in July-December FY2022. These inflows accounted for 25% of total remittances throughout the review period.
In the first six months of FY2022, Pakistani residents working in the UAE sent home $3 billion, compared to $2.956 billion in the same time last year. Remittances from the United Kingdom increased 14 percent to $2.147 billion.
The total amount of money sent home by migrant workers in the United States was $1.494 billion. This compares to $1.205 billion the previous year.
“With $2.5 billion in inflows during December 2021, workers’ remittances maintained their strong momentum of maintaining over $2 billion since June 2020,” the SBP said in a statement on Friday.
In terms of growth, remittances climbed by 2.5 percent month on month and 3.4 percent year on year in December 2021, according to the report. Proactive policy actions by the government and SBP to encourage the use of official channels and altruistic transfers to Pakistan in the midst of the epidemic have positively contributed to the steady inflows of remittances since last year, it added.
“The July-November FY2022 data on employees’ remittances has been revised upward to include inflows into Roshan Digital Accounts (RDA) connected to local consumption (such as payment of utility bills, transfer to local PKR account, and so on).”
Because data on these conversions was not previously accessible per nation, they were reported in the balance of payments figures under ‘other private transactions.’
The data for December 2021 was also compiled in this manner, and same procedure will be repeated in the future, it stated.
