Remittances down 19% year-on-year, clock in at $2.04bn in December

Inflow of overseas workers’ remittances continued to decline in Pakistan, clocking in at $2.04 billion in December 2022, a drop of 19% on a year-on-year basis.

According to data released by the State Bank of Pakistan (SBP) on Friday, the inflow of remittances stood at $2.52 billion in the same month of the previous year. December 2022’s figure is also the fourth successive month-on-month decline.

Remittances continue to decline, clock in at $2.1bn in November

On a month-on-month basis, remittances fell 3.2% as they amounted to $ 2.108 billion in November 2022. On a cumulative basis, the inflow of remittances during the July to December period of the fiscal year 2022-23 stood at $14.052 billion, 11.1% lower than $15.807 billion in the same period of the previous fiscal year.

Overseas Pakistanis in Saudi Arabia remitted the single largest amount in December 2022 as they sent $516.3 million during the month. This was nearly 18% lower than the $626.8 million sent by expatriates in the same month of the previous year.

Remittances from the United Arab Emirates amounted to $328.7 million during the month, a decline of 27% compared to $453.2 million in December 2021.

‘Illegal channels take toll’ as remittances fall nearly 16% in October

Inflows from the United Kingdom fell 8% as they declined from $340.8 million in December 2021 to $314.2 million in December 2022.

Moreover, remittances from the European Union dropped 19.4% as they amounted to $233.3 million in December 2022. Overseas Pakistanis in the US sent $230.5 million in December 2022, registering a year-on-year decline of 7%.

Earlier, JP Morgan in its report highlighted that remittance inflows into Pakistan have tapered off in recent months i.e. averaged $2.5 billion in Aug-Oct 2022, after rising to an all-time high of $3.1 billion in April, though they still remain elevated compared to pre-pandemic levels, which averaged $1.7 billion per month in 2015-19.

“We think a key reason is the slower pace of adoption of digital remittance services as borders reopen and international travel normalises.

“Other reasons may include the moderation of oil prices since 2Q22 and the stabilization of the PKR (Pakistani rupee), which might have reduced incentives to remit back Foreign Exchange FX,” said JPMorgan.

“From a longer-term perspective, we expect workers’ remittances to resume a gradual uptrend on a steady increase in migrant worker flows, notwithstanding temporary ebbs and flows from the global business cycle,” it said.