Remittances to Pakistan likely to cross $28billion in FY2021

January 18, 2021

512

Pakistan is expected to see record remittance flows of up to $ 28 billion this year as initiatives launched by the government and the central bank to assist overseas workers have begun to pay off despite the challenges posed by the COVID-19 pandemic.

Overseas Pakistanis living in the Gulf in general, and the UAE and Saudi Arabia in particular, are likely to maintain the upward momentum of remittances, according to a report in the Khaleej Times. They accounted for 60.14 percent of the total inflow between July and December 2020.

Pakistan received $ 14.203 billion in remittances during the first half of fiscal 2020-21, up from $ 11.37 billion in the same period last year, a significant increase of 24.9 percent. This is the highest semi-annual growth since the 2006-07 fiscal year.

“This strong increase in workers’ remittances is due to the increased use of formal channels amid continuing efforts by the government and the State Bank of Pakistan to encourage flows through official channels,” the State Bank of Pakistan said in a statement. Pakistan received $ 2.4 billion in remittances in December, up from $ 2.1 billion in December 2019, up 16.2 percent. For the seventh month in a row, remittances have surpassed the $ 2 billion mark. This is a new survival path for Pakistan’s ailing economy, which is expected to return to growth this year.

According to the breakdown of remittances, Pakistanis living in the UAE transferred $ 2.96 billion between July and December 2020, up from $ 2.78 billion in the corresponding period last year – an increase of 6.5 percent.

Dubai workers sent home an additional 5.6 percent of the money, transferring $ 2.45 billion during the first half of the 2020-21 fiscal year. Pakistanis sent $ 418.4 million and $ 34.5 million in remittances abroad to Abu Dhabi and Sharjah, respectively, an increase of 5.6 percent and 1 percent.

Meanwhile, remittance flows from Saudi Arabia also grew significantly in the first half of the 2020-2021 fiscal year. Pakistanis transferred $ 3.96 billion overseas, up from $ 3.17 billion in the corresponding period last year, an increase of 24.6 percent.

Beyond the Gulf region, remittance flows from the UK rose to $ 1.88 billion from $ 1.23 billion in the same first half of last year, hitting a record 51.7 percent growth. Pakistanis living in EU countries transferred $ 1.29 billion, representing a significant increase of 41.7 percent. Remittances from the U.S. also rose 47.5 percent, with $ 1.2 billion transferred between July and December 2020, up from $ 816.8 million in the previous year.

Analysts believe the country could receive record remittances of up to $ 28 billion if a similar growth trend continues in the second half ending June 30, 2021. Pakistan received $ 23 billion in remittances during the 2019-20 fiscal year.