Remittances surge to record high

Published: July 11, 2012
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Overseas Pakistani workers remitted a record amount of $13.186 billion in the last fiscal year ended June 30, 2012, compared with $11.201 billion received a year earlier, the SBP said.

Overseas Pakistani workers remitted a record amount of $13.186 billion in the last fiscal year ended June 30, 2012, compared with $11.201 billion received a year earlier, the SBP said.

KARACHI: With an impressive 17.7% annual growth, remittances sent home by overseas Pakistanis surged to a record high and crossed the psychological mark of $13 billion in the previous fiscal year 2011-12, the State Bank of Pakistan (SBP) announced on Tuesday.

Continuous growth in remittances is being billed as a lifeline for Pakistan’s economy, especially when energy shortages and high inflation have hurt gross domestic product (GDP) growth.

“Remittances have been playing a key role in the country’s economic performance,” said Muzammil Aslam, Managing Director of Emerging Economics Consultancy.

“One can safely say that the continuous rise in remittances in the last few years has saved Pakistan from serious economic problems including default on debt repayments.”

Aslam suggested that the government can further increase the flow of remittances if it reduces the difference between interbank and open market exchange rates for the US dollar from the present one rupee to 10 to 15 paisa. “This will encourage overseas workers to send more and more dollars through banking channels instead of illegal means.”

Invest Capital Markets analyst Khurram Schehzad commented that the continuous rise in remittances is significantly positive for the country as the money supported the economy in different forms. Overseas Pakistani workers remitted a record amount of $13.186 billion in the last fiscal year ended June 30, 2012, compared with $11.201 billion received a year earlier, the SBP said.

Except for September ($890.42 million) and November ($924.92 million), Pakistanis remitted more than $1 billion in each of the remaining 10 months.

Monthly average of remittances rose 17.73% to $1.099 billion compared with $933.41 million a year earlier.

In June overseas Pakistanis sent home $1.117 billion compared to $1.104 billion received in the same month of 2010-11.

In the same month, remittances from Saudi Arabia, UAE, USA, UK, GCC countries and EU countries amounted to $333.68 million, $219.14 million, $206.60 million, $128.12 million, $126.72 million and $29.24 million respectively. In comparison, remittances from these countries were $291.55 million, $270.04 million, $204.64 million, $121.35 million, $106.20 million and $33.83 million respectively in June 2011.

Analysts believe that the SBP’s initiative for facilitation of remittances, called the Pakistan Remittance Initiative (PRI), has significantly contributed to the growth of remittances.

Since its inception in April 2009, PRI has taken a number of steps to enhance the flow of remittances through legal channels. These include preparation of strategies on remittances, taking all necessary steps to implement the overall strategy, playing an advisory role for the financial sector in terms of preparing a business case, relationship building with overseas correspondents, creating separate and efficient remittance payment highways and becoming a national focal point for overseas Pakistanis through a round-the-clock call centre.

Published in The Express Tribune, July 11th, 2012.

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Reader Comments (9)

  • Nadir
    Jul 11, 2012 - 4:21AM

    Unpatriotic dual nationals! oh wait….

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  • Jul 11, 2012 - 4:55AM

    Yet we beg for elusive American aid.

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  • Rizwan Afridi
    Jul 11, 2012 - 5:59AM

    @Moise:
    We beg for aid because those remittances completely bypass the government (for better or worse). The money is transferred people-to-people, so the government has no extra money at all for infrastructure/balance of payments etc.

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  • Khalq e Khuda
    Jul 11, 2012 - 7:11AM

    @Rizwan Afridi:

    I think you have no clue how the economy works. These remittances though sent for personal use play a key role in keeping Pakistan afloat by allowing us to pay for imported goods. And need I remind you unlike India, Iran and many third world countries Pakistanis love to import: Japanese cars, Western sportswear, German stationery, Portugese sauces and lets not forget the whole lot of low quality toys, electronics, gadgets and other unnecessary stuff we import from China.

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  • Jul 11, 2012 - 10:00AM

    Remittances are an important source of income for households in Khyber Pakhtunkhwa (KP) and other provinces in Pakistan, according to a 2010 World Bank report titled “Poverty fell in Pakistan in 2001-08 partly because of remittances”. A recent Asian Development Bank study found that foreign remittances constituted 9.4 percent of household income in KP, compared to 5.1% for Punjab, 1.5% for Baluchistan, and 0.7% for Sindh.

    http://www.riazhaq.com/2011/09/pakistani-diaspora-is-worlds-7th.html

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  • Pakistani
    Jul 11, 2012 - 10:53AM

    If guided by the Govt or business people these remittances can proved to be a key factor in the progress of Pakistan.Being an Overseas Pakistani , I have a firm belief in my country .I want to invest as much as possible in my country so that it will benefit the overall economy. Good job overseas Pakistanis and keep it going.

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  • khalsa
    Jul 11, 2012 - 10:36PM

    @Khalq e Khuda:
    other countries too import, indians import largest amount of gold and diamond in the whole world. moreover imported cars are big show in india. see the sales of cars like rolls royce ferrari and other big companies

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  • Dude
    Jul 12, 2012 - 4:31AM

    Well, Pakistan is happy to receive money from overseas Pakistanis but provide no services to us.
    For example Land mafia take over the land of overseas Pakistanis who can not be there to protect thier properties ETC.
    Also govt of pakistan provide a great service to these Pakistanis at the airports by having honest customs officails who rob these people.
    So far it looks like one way street. Just take,take and take but nothing is given in return.

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  • Pakistani
    Jul 12, 2012 - 12:22PM

    @Dude….dont worry just keep playing your part

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