Non-resident Pakistanis send home $10.7bn in 6 months

Remittances sent home by non-resident Pakistanis jumped 10% to $10.7bn during the first six months of this fiscal year as compared to $9.7bn in same period last year, according to latest State Bank of Pakistan data.

However, inflows in December 2018 edged lower by 1.9% year-on-year to $1.61bn, from $1.72bn in the same period of 2017.

Meanwhile, on a monthly basis, remittances were up 5% or $82mn.

The data reveal that Saudi Arabia remained the biggest source of inflows as Pakistani workers in the kingdom remitted $2.56bn during the first half of this fiscal year. This represented a 1.46% increase from $2.53bn recorded in H1FY18 (first half of fiscal year 2018). The United Arab Emirates closely followed with inflows of $2.29bn, up 6.1%, over $2.16bn in the same period last year. Malaysia is also emerging as a major source of remittances with recent inflows surging by 46% – highest growth from any destination – during this period.

Remittances from Malaysia rose to $735mn as against $501mn in H1FY19.

The United States and the United Kingdom remained healthy contributors.

Inflows from the US grew 29.3% to $1.655bn while UK remittances were up 13.5% to $1.533bn, during the period under review. On the other hand, inflows from Gulf Co-operation Council countries declined by 7% to $1.04bn while those of EU dipped 1.3% to $310mn. Pakistan ranks fifth worldwide in amount of remittances received.

The government has been seeking dollars from a number of friendly countries to meet its twin deficits as well as trying to boost remittances by luring overseas Pakistanis.

Remittances are now half of the import bill and almost equal to export proceeds but Pakistan still needs more than $18bn by FY19-end. Pakistan had received about $20bn in the last fiscal. The country is also planning to send about 100,000 labourers to Qatar which could give a huge push to annual inflows. The government further announced that Saudi Arabia is likely to invest $15bn in Pakistan while more investment from other countries may follow.

These inflows could partially offset the twin deficits, low foreign exchange reserves and exchange rate imbalances.

Reserves held by the State Bank of Pakistan further decreased by $239mn to $7.05bn during the week ended on January 4 on account of debt servicing and other official payments.