High hopes have been attached to the remittances under the new government with the Premier also asking the overseas Pakistanis for funds for Diamer Bhasha Dam. The latest data from SBP shows that expatriates sent $5.4 billion in 1QFY19 versus $4.8 billion in 1QFY18. September 2018 inflows stood at $1,452 million. On the face of it, a 12.25 percent year-on-year growth in September 2018 inflows, and 13.14 percent in 1QFY19 isn’t a bad start to a year that hasn’t shown much love to the overall economy.

However, digging deeper into the numbers and growth rates shows two things. First, more than feeling the heat of Naya Pakistan, the remittance growth in 1QFY19 is attributable largely to the two Muslim celebrations of Eid–ul–Fitr and Eid–ul–Azha, one falling in this period, while the other very close to the beginning of this fiscal year. Hence, higher remittance around the two festivities is more of a seasonal factor.

Second, even though September inflows are up by over 12 percent year-on-year, there has been a 29 percent month-on-month decline in inflows for September 2018. What’s more is that these monthly inflows have been the lowest since February 2018. A reason likely for a slip in the monthly inflows is the fact that expats send less back home after the ‘seasonal sending spree’.

Currency fluctuations also affect remittances. Over the last seven months, the rupee has depreciated for the third time just recently, and the effects of this recent steep depreciation will be visible in the coming months.

While the non-resident Pakistanis can make the best of sliding domestic currency with more bang for the buck back home, the situation has a caveat; those at home (in Pakistan) will now be facing higher inflation, which could somewhat have a nullifying effect.

The coming months will show what’s in store for home remittances. The PM has recently announced that the government will soon come up with a special package for the overseas Pakistanis to encourage them to send monies through formal channels. If there is a growth, one will have to see whether it’s due to currency fluctuations or a result of higher trust in the government.