Growth in remittances has been phenomenal. However, remittance in July 2022 saw a dip of almost 8 percent year-on-year as per the central bank’s latest data. On a month-on-month basis, remittances in July were down by 8.6 percent. The decline came post Eid-ul-Azha. But unlike the normal trend of a decline in remittances in a month post the Eid festivities, the decline came in the same month as Eid-ul-Azha.
Also, the decline remittances in July 2022 was not just the -Eid effect; home remittances also fell year-on-year, which shows there was a decline due to other factors that most likely include inflation around the world. Country wise, Saudi Arabia remained the most important contributor to workers’ remittances with over $580 million in July 2022. However, this was down from $666 million recorded in June.
In FY22, remittances posted record growth with over $31.2 billion inflows cent year-on-year and crossing the $30 billion mark for the first time with over $2 billion remittances every month. In that respect, remittances continued to post over $2 billion in remittances in July2022. Despite the recent monthly slowdown, remittances have been growing phenomenally over the last two years primarily due to the incentives to formalize the payment channels as well as the global and country dynamics in terms of travel restrictions, money transfer, FATF efforts, layoffs and lockdowns, currency depreciation, and fiscal stimuli in the host and countries.
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