Depending on remittances

The sun seems to have set on the foreign direct investment. But remittances, the fortunate cousin, have been seen to flourish supplely year on year. The receipts from overseas Pakistanis continued to remain upbeat reaching the level of 8.2 billion dollars during the first seven months of FY13.
It has always been the only resilient support to the current account. Keeping the upward trajectory with a significant increase of 10.36 percent YoY during 7MFY13, the remittances once again acted as a major support to the countrys balance of payments position.
This supporting nature of foreign inflows from Pakistani Diaspora living abroad needs to continue during the rest of FY13 for the country to avoid a balance of payment crisis.
Foreign reserves have already dipped from 15.23 billion dollars in January 2012 to 13.7 billion dollars in mid January 2013. And this does not end here. Even with 1.8 billion dollars on account of Coalition Support Fund (CSF), the threat of debt payments looms over the countrys foreign exchange reserves.
Moreover, the 1.7 billion dollar IMF payment waiting in the second half of FY13, which has already begun, is the greatest source of intimidation for the current account deficit in the days to come.
Sadly there are no more inflows expected during the ongoing fiscal year. And whether the country opts to go ahead with the payment to the IMF or defaults, there will be no stopping to the currency depreciation, and the reserves will certainly come under duress.
The good news is that the prospects of the foreign receipts from Pakistanis residing abroad are upbeat. Analysts and economists are waiting sanguinely for the home remittance to cross the psychological 16 billion dollar mark.
Also, some efforts are being promised by the Ministry of Overseas Pakistanis to increase foreign exchange reserves, stabalise exchange rate and boost remittances further. This would help raise around three billion dollars from remittances in the coming three to four months of the remaining FY13.