Remittance inflows maintained their level of above the $2 billion marks for the 14th straight month in Pakistan, which depicted its sustainability and growth potential in the future.
According to the State Bank of Pakistan (SBP), the remittances sent by overseas Pakistanis stood at $2.71 billion in July 2021.
For the 14th straight month, remittances were over $2bn in Jul. At $2.7bn, they were higher than Jun and slightly lower, by $57mn, than Jul20, despite fewer working days due to Eid. This is the 2nd highest level ever observed in Jul: https://t.co/7XBd4uNES4 pic.twitter.com/4dWj8HIpif
— SBP (@StateBank_Pak) August 10, 2021
This is the second-highest ever level of remittances reported in the month of July. In April, the worker’s remittance surged to the all-time high of $2.8 billion.
A.A.H Soomro, Managing Director at Khadim Ali Shah Bukhari Securities, told Propakistani,
Remittances continue the strong momentum due to Eid-related expenses. This is handy in times when imports are rising aggressively and PkR is slipping. Current Account Deficit is in the new normal growth phase of 3% GDP growth
The growth in the remittances was driven due to Eid-ul-Azha, which witnessed inflows of extra amounts from overseas Pakistanis who usually celebrated their sacrificial obligation in Pakistan with their family members/relatives and charitable organizations.
In terms of growth, remittances increased by 0.7 percent over the previous month and showed a decline of 2.1 percent over the same month last year.
Remittance inflows during July 2021 were mainly sourced from Saudi Arabia ($641 million), United Arab Emirates ($531 million), United Kingdom ($393 million), and the United States ($312 million).
Proactive policy measures by the Government and SBP – to incentivize the use of formal channels – curtailed cross-border travel in the face of COVID-19. Furthermore, altruistic transfers to Pakistan amid the pandemic and orderly foreign exchange market conditions have positively contributed towards the sustained improvement in remittance inflows since last year.
The momentum in remittances is handy in times when imports are rising aggressively and the Rupee is slipping. The Current Account Deficit is in the new normal growth phase of 3 percent GDP growth, said analysts.