Remittances: Massive Decline in July, August 2023 witnessed

September 13, 2023

Pakistan’s Foreign Remittances nosedived in First Two months (July-August) of Fiscal year 2023-24 marking a decline of 22%, as reported by the State Bank of Pakistan (SBP)

According to the SBP, Pakistan received a total of $4.12 billion in workers’ remittances during July and August of FY24. This marked a significant decrease compared to the $5.25 billion received during the same period in the previous fiscal year FY23, reflecting a substantial drop of 21.6% or $1.13 billion.

The declining trend in home remittance inflows was observed across all major destinations. Notably, remittances from Saudi Arabia, the largest contributor to overall inflows, decreased by 23% to $977 million in the first two months of the current fiscal year. During this period, remittances from the United States of America (USA) and the United Kingdom (UK) also saw declines of 7.6% and 18%, amounting to $504 million and $638 million, respectively.

In the July-August period of FY24, overseas Pakistanis in the United Arab Emirates (UAE) sent home remittances totaling $623 million, marking a significant decline of 37.4%.

For the month of August 2023, remittances were primarily sourced from Saudi Arabia ($490.1 million), the UK ($331.3 million), the UAE ($308.0 million), and the USA ($262.4 million).

It’s worth noting that Pakistan, facing financial challenges, is actively seeking healthy foreign inflows to bolster its depleting foreign exchange reserves and avoid defaulting on debt servicing. In FY22, the country received its highest-ever remittances of $31.27 billion, but this figure declined by 13% to $27 billion in FY23.