Remittances rise 17% in first half

Remittances sent home by overseas Pakistanis soar to $5,291m million in the first half of current fiscal year.

KARACHI: Remittances sent home by overseas Pakistanis soared 16.8 per cent to $5,291.41 million in the first half (July-December) of the current fiscal year 2010-11, in line with an increasing trend over the last two years after the government tightened the noose around illegal transfer systems.

Remittances increased $761.23 million against the $4,530.18 million received in the same period of the last fiscal year, the State Bank of Pakistan (SBP) announced on Tuesday.

The monthly average of remittances for July-December 2010 came to $881.9 million, compared with $755.04 million received during the corresponding period of last year, marking an increase of 16.8 per cent.

BMA Capital Head of Equity Research Hamad Aslam said that remittances have surged despite the fact that major global economies are suffering a slowdown, which has blocked pay increases and caused job losses.

In addition to the two Eids, charity contributions from overseas Pakistanis have also caused an increase in remittances.

The charity money came in the wake of widespread destruction caused by floods in August last year. The deluge displaced millions of people and damaged crops and livelihood.

Aslam said that the country receives around $15 billion annually in remittances, of which about half was previously sent through illegal channels. However, after a crackdown by the government about two years back on the ‘hundi’ and ‘hawala’ system, remittances from legal channels have increased.

The programme has borne fruit and remittances through legal channels have been showing continuous growth for more than a year.

Banks have also played their part in encouraging people to send money through legal channels by introducing attractive money transfer schemes and a fast-track system.

This year remittances will reach around $10.5-11 billion, predicted Aslam.

The inflow of remittances from the UAE, Saudi Arabia, the US, Gulf Cooperation Council (GCC) countries (including Bahrain, Kuwait, Qatar and Oman), the UK and EU amounted to $1,255.65 million, $1,143.82 million, $997.68 million, $626.29 million, $577.17 million and $172.10 million, respectively.

In the same period last year, remittances from these countries were $1,021.91 million, $845.91 million, $938.40 million, $642.45 million, $482.79 million and $142.79 million, respectively.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first half of 2010-11 amounted to $518.69 million against $454.94 million in the same period last year.

In December, overseas Pakistanis sent home $863.11 million, up 23.72 per cent or $165.51 million, when compared with $697.6 million received in the same month in 2009.

Published in The Express Tribune, January 12^th, 2011.