Several heads of exchange companies and remittance firms tell BR Research that Pakistanis working and living abroad send more money back home than usual in the weeks before the two Eid’s every year. Well, it seems almost intuitive that folks would send higher inflows to their loved ones for Eid-related shopping expenses, as gifts, for home improvements, and to give alms, etc.
BR Research recently analysed official remittance data for the eight calendar years this decade (2011-18) thus far and found some credence to that observation. For the sake of analysis, the Gregorian month used for Eid was not necessarily the same as the one in which an Eid fell. Instead, that Gregorian month has been used in the analysis which has the most days falling in it, out of a 30-day period prior to Eid day.
So, for instance, in 2015, July was taken as the analysis month for Eid al-Fitr, which fell on 17 July 2015. But for 2016, June was taken as the analysis month, for the Eid al-Fitr fell on 6 July, 2016. The month-on-month changes pertaining to these Gregorian months every year were analysed to see whether or not Eid-related seasonality existed in Pakistan’s official remittance inflows.
The analysis suggests that remittance has a greater seasonality for Eid al-Azha than it has for Eid al-Fitr. For instance, average month-on-month change for Eid al-Fitr months (i.e. Gregorian months for analysis) had stood at 6 percent this decade. The average month-on-month change dropped to one percent during the last five years. In the last five years, the Eid-related monthly growth rates have, in fact, been lower than monthly growth rates in the two months preceding.
The Sweet-Eid’s comparison with the Eid al-Azha doesn’t look charitable at all. The average month-on-month change for Eid al-Azha related months came in at 18 percent this decade thus far. The average monthly change improved to 22 percent when the analysis period was reduced to the last five years. In that timeframe, the average monthly growth rates have gone into the negative territory for the two months following the analysis month for Eid al-Azha.
This overall pattern – where remittances around Eid al-Azha outperform remittances around Eid al-Fitr – is also visible in the five main remittance origins: Kingdom of Saudi Arabia (KSA), United Arab Emirates, United States, United Kingdom, and the other GCC countries. (These five corridors accounted for over 85 percent of Pakistan’s remittances in FY18).
However, the remittances around Eid al-Fitr have been particularly weaker from the GCC region, especially KSA, compared to monthly growths seen from this region closer to Eid al-Azha. On the other hand, the US and the UK corridors show remittance-related monthly spikes in analysis months related to both Eid al-Fitr and Eid al-Azha, with the monthly growth rates more pronounced in the latter Eid.
Lack of empirical studies on specific remittance corridors means that reasons are unknown as to why inflows around Eid al-Azha are higher compared to Eid al-Fitr. Anecdotally, the difference can be attributed to the Eid al-Azha requiring comparatively higher spending (on account of buying sacrificial animal). And since the two Eid’s come so closer together, overseas folks perhaps like to send more on the bigger Eid.
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