KARACHI: During a challenging period when the country is striving to secure healthy foreign inflows to meet its external obligations, workers’ remittances saw a significant 44 percent increase in the first two months of this fiscal year (FY25).
According to statistics released by the State Bank of Pakistan, the country received home remittances inflows amounting to $5.94 billion in July-Aug of FY25 compared to $4.12 billion in the same period of last fiscal year (FY24), depicting an increase of $1.81 billion.
Currently, the country is seeking foreign inflows to avoid default and ensure timely repayments of external debt. Pakistan earlier this year completed a $3 billion short term programme with the IMF and is now in process of a long-term $7 billion program to build the foreign exchange reserves.
Analysts have noted that the robust growth in home remittances during this critical period is a positive indicator for the country’s economy. They anticipate that this upward trend will persist in the coming months, especially as the exchange rate stabilizes. All major corridors of workers’ remittances witnessed an upward trend, however, the healthy growth in the home remittances is attributed to massive increase in the inflows from Saudi Arabia, UK and United Arab Emirates (UAE).
With 25 percent share in overall remittances, Saudi Arabia ranked one. Home remittances from Saudi Arabia rose by 51 percent to $1.473 billion in the first two months of this fiscal year, up from $978 million in the corresponding period of last fiscal year. During the period under review, remittances from the UK increased by 44 percent or $282 million to reach $ 918 million. In addition, inflows of workers’ remittances from the US surged from $504 million to $622 during July-Aug of FY25, showing an increase of 23.5 percent or $118 million.
The UAE is another major source of home remittance, where 84 percent growth was recorded in the first two months of this fiscal year. Inflows amounted to $1.15 billion arrived from UAE in July-Aug of FY25 as against $624 million in the same period of last fiscal year.
Month-on-month basis, remittances by overseas Pakistanis decreased by 1.7 percent to $2.94 billion during Aug 2024 compared to $2.99 bn during July 2024. However, inflows of remittances in August 2024 are some 40 percent higher than August 2023, in which the country received $2.1 billion home remittances.
Remittance inflows during August 2024 were mainly sourced from Saudi Arabia amounted to $713.1 million, United Arab Emirates worth $538.4 million, United Kingdom $474.8 million and USA amounted to $322.4 million.
Copyright Business Recorder, 2024
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