Remittances amount to $17.8b in 11 months, up 5.6%

Money sent home stood at $16.9b in same period of previous fiscal year

KARACHI: Overseas Pakistanis sent remittances amounting to over $17.8 billion in July-May, up 5.6% from a year ago, according to data released by the State Bank of Pakistan (SBP) on Friday.

Remittances amounted to $16.9 billion in the same 11 months of the preceding fiscal year. They amounted to almost $1.8 billion in May alone, which is 8.6% higher than the remittances received in the preceding month, SBP data shows.



Remittances receive a spike every year in the weeks leading up to Eid, as overseas workers send money home for annual celebrations.

The year-on-year increase in remittances was 16.5% in 2014-15, as Pakistanis based in foreign countries sent home $18.4 billion in the last fiscal year. The relative slowdown in the pace of growth in remittances seems alarming in 2015-16 so far.

According to the SBP, the slowdown is because of “very low inflation” across advanced economies and a slow global economic recovery.

However, global remittances data shows Pakistan still managed to post a “relatively decent growth” among the top 20 remittance-receiving countries. Only Pakistan and Indonesia recorded year-on-year growth of more than 10% in remittances in the last calendar year, the SBP said.

Inflows from Saudi Arabia were the largest source of remittances in Jul-May. They amounted to nearly $5.4 billion in the 11 months, up 5.7% from the corresponding period of last year.

Remittances received in Jul-May from the United Arab Emirates (UAE) increased 3.2% to $3.9 billion on a year-on-year basis. Inflows from the UAE had registered the largest increase (26.1%) from any major remittance-sending country in 2014-15, SBP data shows.



In the first 11 months of the current fiscal year, remittances from Dubai surged 23% year-on-year. But the figure for overall inflows from the UAE so far has remained subdued because of a 22.6% annual decline in remittances from Abu Dhabi over the same period.

Remittances from the United States and the United Kingdom remained more than $2.2 billion each in Jul-May. The year-on-year change in remittances from the US and the UK has been -8% and 6.6%, respectively.

According to a separate SBP report issued recently, it believes that US workers of Pakistani origin are holding on to their savings within the United States instead of remitting them back home. They are withholding that portion of their savings that they would otherwise send their families for “investment purposes,” the SBP said.

Remittances from Gulf Cooperation Council (GCC) countries, excluding Saudi Arabia and the UAE, stood at almost $2.2 billion in Jul-May, which is 11.5% higher than the remittances received from these countries in the same months of the preceding fiscal year.

Remittances from Oman equalled $740.6 million while those from Kuwait, Bahrain and Qatar amounted to $695.5 million, $409.8 million and $344.5 million, respectively.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries in May amounted to $170 million as opposed to $101 million in the same month of 2015.

Published in The Express Tribune, June 11^th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.