The Pakistan Industrial & Traders Association Front (PIAF) has asked the government to announce incentives and attractive package for Oversees Pakistanis to enhance the volume of foreign inflows, as the country received 1.43 percent less remittances amounting to $5.47 billion in first quarter of 2019-20 compared to $5.55 billion in the corresponding period of the previous year.
PIAF chairman Mian Nauman Kabir, expressing his concern over the drop, said remittances could help in partly financing the deficit in import payments and foreign debt repayments. He suggested the government that structural reforms can revive Pakistan's economic growth with major focus on incentives for oversees Pakistanis workers. If government supports Overseas Pakistanis and provides them incentives, they can play a vital role in boosting Pakistan's economy through their remittances and investments for high economic growth.
He said the government's efforts raised the question mark taken under Pakistan Remittance Initiative to support the higher remittance flows in the FY20. The government targets workers' remittances to reach the level of $24 billion during the current fiscal year of 2019-20 have created doubt now, he added.
He said the drop in remittances is disappointing despite the fact that the State Bank of Pakistan has allowed exchange companies to start work on directly attracting worker remittances from the countries from where the inflows remain nominal. He said migrant cash flow, which is a lifeline for the country's struggling current account deficit, is expected to weaken more in the coming months as the US economic slowdown and its trade war with China hits global economy.
He said according to the central bank data, Pakistanis living abroad sent 17 percent less money home in August compared with the previous month of July 2019, remitting $1.69 billion in Aug 2019 from $2.039 billion in July, showing a decline of $348.4 million on month-on-month basis.
Remittances, one of the country's biggest sources of foreign currency, fell 8.37 percent in the first two months of the current fiscal year of 2019-20, standing at $3.73 billion during Jul-Aug FY20 compared with $4.07 billion recorded in the same period last year.
Lamenting the gloomy picture of country's position in the region with regard to its GDP growth in 2019, he said upward trend in Sep remittances to Pakistan from overseas workers is positive news for the country's economy. He said it is also good news for the country that Pakistan's trade deficit has narrowed but exports are almost flat despite huge depreciation in rupee.
The PIAF chief said growth of 18 percent in remittances in Sept to $1.74 billion compared to $1.48 billion of last year's Sept gives some positive hope. The growth has also helped increase overall inflows in the Jul-Sept quarter. A significant drop in remittances in the second month of August of the quarter had a notable negative effect on the overall growth in the quarter, he added.
Copyright Business Recorder, 2019
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