KARACHI: Overseas Pakistani workers sent remittances amounting to $1.69 billion in March, an increase of 19% from February when it stood at $1.42 billion, according to data released by the State Bank of Pakistan (SBP) on Monday.
However, cumulatively, the figure fails to convey the whole picture as remittances during the first nine months (July-March) of the current fiscal year declined to $14.06 billion from $14.39 billion in the same period of previous fiscal year - a fall of 2.29%.
Remittances from Saudi Arabia take a hit in January
Additionally, the country received $1.69 billion in March, down 1.1% compared to $1.71 billion in the same month of the previous year.
Remittances play a major role in stabilising Pakistan’s external sector, as they make up almost half the import bill and cover the deficit in the trade of goods account. Nevertheless, in recent times, they have come under pressure due to global economic slowdown on the back of low crude oil prices.
Country wise details for the month of March show that the inflow of remittances from Saudi Arabia - the country that hosts the largest diaspora of Pakistanis (about 2.2 million) in the world - came down to $504.6 million, compared to $514.8 million in the same month of the previous year.
July-December: Remittances slide down 2.27% year-on-year
A chief reason for this could be that the kingdom deported more than 39,000 Pakistanis in the past few months due to low oil prices and growing security concerns.
Meanwhile, funds from other Gulf countries - excluding the UAE - also declined to $197.21 million from $212.47 million in the March-on-March comparison. Similarly, remittances from the UAE dropped to $363.24 million from $396.35 million in the same period under review.
Under the same March-on-March comparison, remittances from the European Union countries increased to $38.85 million from $26.61 million and inflows from the United States increased to $213.29 million from $202.73 million. Similarly, inflow from the United Kingdom increased to $209.14 million from $202.37 million.
Remittances in November up 3.27% year-on-year
Declining exports and a gradual slowdown in remittances have been a major concern for the economic stakeholders of Pakistan. The country received remittances amounting to $19.9 billion in the fiscal year 2015-16, up 6.4% from the previous year.
Analysts have warned that the country’s foreign reserves might deplete fast in the coming months unless its policymakers take serious steps in increasing exports on sustainable basis. However, the SBP is confident that the country faces no immediate threat from the slowdown in remittances and it is in a much better position to repay debts in the next four to five years.
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