KARACHI: Inward remittances sent by overseas Pakistani workers increased by more than 10 percent to $9 billion in the first seven months of the current fiscal year, the State Bank of Pakistan (SBP) reported on Tuesday.
Last year, Pakistani expatriates sent $8.2 billion to their homes.
Economists said the remittances are rising at the modest pace of 10 percent that is quite encouraging for the capital and financial accounts of the country.
“The seven months figures on the workers’ remittances are quiet normal; however, the previous figures showed abnormal growth in the volume of remittances, as it was rerouting illegal or black money,” said Dr Ashfaque Hassan Khan, Dean at NUST Business School.
“Remittances have been supporting the balance of payments by financing the current account due to weakening capital and financial accounts,” he said.
“I foresee workers’ remittances to soar to $14 billion to $15 billion by the end of this fiscal year,” he said.
The SBP data revealed that the Middle East countries took the lead in attracting remittances inflows followed by the US in July-January FY14. The UK and the EU countries also held a decent share in the workers’ remittances during the period under review.
The inflows of remittances from Saudi Arabia and the UAE in the country stood at $2596.86 million and $1785.84 million, respectively, while the US, the UK, GCC countries, including Bahrain, Kuwait, Qatar and Oman, and the EU countries, sent $1441.42 million, $1309.31 million, $1048 million and $251.13 million, respectively.
Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first seven months of the current fiscal year amounted to $600.85 million.
In January, the inflows of remittances from Saudi Arabia, the UAE, US, the UK, GCC countries, including Bahrain, Kuwait, Qatar and Oman, and the EU countries amounted to $393.12 million, $213.50 million, $193.01 million, $169.46 million, $150.31 million and $34.56 million, respectively.
Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the seventh month of the current fiscal year amounted to $89.43 million.
According to the SBP report, inflows under current transfers continued to compensate for the deficits seen in trade, services and income accounts. Over the last few years, workers’ remittances have become one of the most important sources of forex receipts on the back of the rising number of Pakistanis, seeking employment abroad and efforts under the Pakistan Remittance Initiative to encourage use of official sources for sending money to Pakistan.
In FY13 also, workers’ remittances continued their increasing trend and reached $13.9 billion, almost meeting the annual plan target of $14 billion. The increase in FY13 was most pronounced from Bahrain, the UK, Australia and Sweden. The Middle East showed a mixed picture: robust economic activity in Saudi Arabia, Kuwait and Abu Dhabi helped increase Pakistan’s remittances, inflows from Oman and Qatar were stagnant, while inflows from Dubai and Sharjah fell.
Furthermore, remittances from Japan and the US declined in comparison with FY12.