KARACHI: Pakistan received workers’ remittances amounting to $19.62 billion in fiscal year ended June 30, an amount short of the target by over $1 billion, but 1.4% higher when compared with the previous fiscal year. Authorities had set a target of $20.7 billion for the year.
The shortfall of over 5% appears significant at a time when the county’s foreign currency reserves have fallen to a critically low level of less than two months of import cover. Reserves stood at $9.78 billion as on June 29, 2018. Analysts expected a higher amount of remittances, especially in June, keeping in view Eid holidays during the month. However, June 2018 saw the country receiving just $1.59 billion, 14% less than $1.84 billion received in the same month of the previous year.
Analysts said a cutback in expenditure across oil-producing and exporting countries could have caused Pakistan to miss its target, as such places have cut short jobs for overseas workers. They added that the country has missed the target despite a weaker rupee.
The rupee devaluation was allowed to attract higher inflows. However, the tactic played the opposite role due to speculation that the rupee would further weaken in the time to come. The speculation could have convinced exporters and overseas Pakistanis to hold on until the rupee weakens further. Laws allow exporters to delay receipt of their proceeds from overseas buyers by a maximum 90 days, according to analysts.
Cumulatively, for the full fiscal year 2018, remittances are slightly higher by 1.4% than $19.35 billion received in the prior fiscal year 2017, the State Bank of Pakistan (SBP) reported on Tuesday.
Country-wise details for June 2018 show that inflows from Saudi Arabia amounted to $336.61 million in the month compared to $438.07 million in the same month of the previous year. Workers from the UAE sent $340.55 million compared to $414.25 million in the previous year. Amount from the US stood at $248.79 million compared with $265.52 million in June 2017, while workers in the UK sent $245.10 million compared with $252.50 million in the previous year.
GCC countries (including Bahrain, Kuwait, Qatar and Oman) sent $163.53 million compared with $232.89 million and amount from EU countries stood at $62.14 million compared with $56.97 million in June 2017. Remittances received from Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries during June 2018 amounted to $197.69 million as against $180.04 million received in June 2017.
Published in The Express Tribune, July 11th, 2018.