Inflow of overseas workers’ remittances registered a significant increase to clock in at $2.5 billion in March 2023, an increase of 27.4% on a month-on-month basis, as compared to $1.98 billion in February 2023, showed data released by the State Bank of Pakistan (SBP) on Monday.

The inflows were the highest recorded since August 2022, and attributed to the Ramadan factor.

“This is a seasonal rise due to the ongoing month of Ramadan, where a lot of funds are remitted on account of Zakat and other charities, which is reflected in the increase in remittances,” Saad Khan, Head of Research at IGI Securities, told Business Recorder.

“On account of increase in remittances, the current account deficit for the month of March is likely to be negligible, and there is also a strong possibility of a current account surplus this month,” he added.

Remittances clock in at $2bn in February, down 9.5% on a yearly basis

On a yearly basis though, the inflow of remittances registered a decline of 11%, as they stood at $2.83 billion in the same month of the previous year, the data showed.

On a cumulative basis, the inflow of remittances during the July to March period of the fiscal year 2022-23 stood at $20.527 billion, 10.8% lower than $23.018 billion in the same period of the previous fiscal year, a decline of nearly $2.5 billion.

“During the FY22 the average remittance figures stood at $2.6 billion, so the latest figures are not too exciting,” said Khan.

The market expert said that on an annualised basis, the ongoing rupee depreciation and the increase in black market premiums have become a major headache, as people are diverting their inflows from formal channels.

“The problem of hawala and hundi remains rampant, which is being reflected in the cumulative decline,” he added.

January foreign remittances at 31-month low, clock in at $1.9bn

Overseas Pakistanis in Saudi Arabia remitted the single largest amount in March 2023 as they sent $564 million during the month. This was nearly 18% lower than the $686 million sent by expatriates in the same month of the previous year.

Inflows from the United Kingdom inched up 5% as they increased from $402 million in March 2022 to $422 million in March 2023.

Jul-Feb FY23: IT, ITeS export remittances up 1.7pc to $1.718bn

Remittances from the United Arab Emirates amounted to $407 million during the month, a decline of 22% compared to $521 million in March 2022.

Moreover, remittances from the European Union increased 6% as they amounted to $299 million in March 2023. Overseas Pakistanis in the US sent $316 million in March 2023, registering a year-on-year growth of 5%.