KARACHI: Workers’ remittances continued their strong growth and rose by 27 percent during the second month of this fiscal year (FY22) due to proactive policy measures by the government and the State Bank of Pakistan (SBP).
The SBP on Friday reported that Pakistan received home remittances inflows amounting to $2.66 billion in August 2021 compared to $2.1 billion in August 2021, depicting an increase of $65 million. This is the sixth consecutive month when inflows were recorded at around $2.7 billion on average, and 15th successive month in which the country has received workers’ remittance above $2 billion. The country is receiving over $2 billion home remittances inflows since June 2020.
In terms of growth, remittances increased by 26.8 percent (year on year) in August 2021, which is also a decade high growth rate for that month. On a month-on-month basis, inflows were marginally lower than $2.7 inflows in July 2021, reflecting the usual post-Eid slowdown. Nevertheless, this seasonal decline was far less this year compared to historical trends, the SBP said.
Cumulatively, home remittances, sent by overseas Pakistanis, grew by 10.4 percent or $505 million during the first two months of this fiscal year over the same period last year (FY21). Overall, inflows amounting to $5.364 billion arrived in July-Aug of FY22 as against $4.859 billion in the corresponding period last fiscal year.
Workers' remittances amount to $2.71 billion in July, down 2.1% YoY
During the last few years, the State Bank has taken a number of policy measures to increase the legal inflows of home remittances. According to the SBP, proactive policy measures by the government and SBP to incentivise the use of formal channels, curtailed cross-border travel in the face of COVID-19 and altruistic transfers to Pakistan amid the pandemic have helped increase the home remittance inflows since last year.
In addition, orderly foreign exchange market conditions have also positively contributed towards the sustained improvement in the growth of remittances, it added.
Remittance inflows during the first two months of this fiscal year were secured from Saudi Arabia, United Arab Emirates, United Kingdom and the United States. Although there is some 5.6 percent decline in the inflows from Saudi Arabia, however, it is still the largest contributor in overall home remittances inflow. Overall $1.335 billion were received from Saudi Arabia during July-Aug of FY22, down from $1.414 billion in the same period last fiscal year.
Inflows from the United States and United Kingdom rose by 30.6 and 7 percent to $591 million and $746 million, respectively. Remittances from UAE increased by 10 percent to $1.043 billion in the first two months of this fiscal year.
During August 2021, inflows were mainly received from Saudi Arabia, amounting to $694 million, United Arab Emirates $512 million, United Kingdom $353 million and the United States $279 million.
Copyright Business Recorder, 2021