Remittances Touch Seven Month High

In December 2019, the inflows of workers’ remittances amounted to $2.097 billion, a seven month high since May 2019. It is 15.25% higher than $1.819 billion of November 2019 and 20% higher than December 2018, in which $1.748 billion inflows were recorded.

Remittances sent by overseas Pakistanis increased by 3.31% during the first half year (July-December) of this fiscal year (FY20) as compared to the corresponding period of last fiscal year (FY19).

According to the State Bank of Pakistan (SBP), overseas Pakistani workers remitted $11.395 billion in July to December of FY20 compared to $11.03 billion received during the same period in the preceding year.

With an increase of 6.44%, some $1.753 billion were received from UK. Similarly, home remittances from Saudi Arabia mounted up by some 2% to $2.618 billion during July-Dec of FY20.

According to the analysts, an increase in Pakistanis taking up jobs in foreign countries may have played a big role in boosting remittances to Pakistan. Some of them are calling it this as a result of improved employment scenario in Saudi Arabia and UAE particularly.

Manpower export from Pakistan to Saudi Arabia more than doubled in 2019. The overall manpower export from Pakistan to the rest of the world also registered a significant increase during the same time period.

The country-wise details for the month of December 2019 show the inflows from the major countries and regions:

  • Saudi Arabia: $472.94 million
  • UAE: $427.56 million
  • USA: $357.45 million
  • UK: $324.57 million
  • Bahrain, Kuwait, Qatar, and Oman: $205.73 million
  • EU countries: $56.42 million

Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during December 2019 amounted to $252.56 million together against $216.35 million received in December 2018.

“Pakistan’s has seen a 3.3% rise in remittances in 2019 as compared to 2018. It is good news for the country however we still need to improve on many fronts such as curbing the use of illegal channels such as hundi for transfer of money.”

“Also, more investment is needed in human development and training so the quality of our workforce improves resulting into better positions for our expats in other countries hence better remittances” said Osama Rizvi, an economic and geopolitical analyst.

The SBP has pointed out in its quarterly report that the PRI has aided the Pakistan Post and the National Bank of Pakistan to jointly enhance their tie-ups with 41 money transfer operators in the UAE and Saudi Arabia during the current year.

Also, under the “foreign remittance initiative” project, families of Pakistani workers can receive remittances from 240 branches of Pakistan Post for free. Other incentives include the exemption from WHT on bank accounts fed with remittances, and the reimbursement of marketing charges to exchange companies and banks.