KARACHI: Overseas Pakistani workers sent home $3.5 billion in remittances during the two months of the current fiscal year of 2017/18, 13.18 per cent higher than a year earlier, the central bank data showed on Tuesday.
Workers’ remittances rose 26.8 per cent month-on-month to $1.95 billion in August, showed the figures of State Bank of Pakistan (SBP). Analysts termed the rise in remittances to Eid festivities.
They said the remittances outlook for the whole of FY2018 would remain depressing due to uncertainty about the improvement in economic conditions of Gulf countries, especially Saudi Arabia, which is the main source of remittances to Pakistan
“Eid related inflows contributed to an increase in the amount of cash sent to Pakistan,” a senior banker said. “(But), if the Saudi government continues to lay off foreign workers, including Pakistanis, it would have negative implications.”
The SBP’s data further showed that the country received $920.12 million in remittances from expatriates in Saudi Arabia in July-August FY2018 compared with $885.95 million during the same period of the last fiscal year.
Remittances from the United Arab Emirates, the second largest sender of such inflows to Pakistan, stood at $775.01 million during the period as against $694.60 million a year ago. Remittances from other major corridors, such as US and UK also showed a decent growth during the two months of the current fiscal year.
A banker, however, said inflows could be under tremendous pressure in times to come. Remittances fell 3.08 per cent to $19.303 billion during the last fiscal year of 2016/17 as fiscal measures triggered by subdued oil prices in Gulf Cooperation Council countries and labour market policies in Saudi Arabia caused job losses.
In FY17, remittances from Saudi Arabia fell 8.35 per cent to $5.469 billion. Worries that the country’s balance of payments might face more pressure are stimulated by growing concerns over the rapid depletion of foreign exchange reserves due to decline in exports and weak remittances.
The trade deficit, however, swelled 36.32 per cent to $32.578 billion in July-June as imports rose 18.67 per cent to $53.026 billion, while exports fell 1.63 per cent to $20.448 billion. The country’s current account deficit hit 4 per cent of GDP for the last fiscal year, surpassing the annual targets of the government, State Bank and IMF, as the deficit amounted to $12.098 billion 2016/17 up almost two times over the last year.
Exports, however, rebounded during the two months of the current fiscal year, rekindling hope of improvement in balance of payments account.