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KARACHI: Inflows of workers' remittances maintained a strong momentum and posted a healthy growth of some 25 percent during the first half (July-Dec) of this fiscal year (FY21). On a cumulative basis, workers’ remittances reached an unprecedented level of over $14 billion during the first half of FY21, some 24.9 percent higher than the same period last year. This is the highest half yearly growth since FY07.

According to Statistics released by State Bank of Pakistan (SBP), overseas Pakistanis remitted some $14.203 billion in July-Dec of FY21 compared to $ 10.988 billion in some period of last fiscal year (FY20), depicting an increase of $3.215 billion.

This strong growth in workers’ remittances is attributable to the increased use of formal channels on the back of sustained efforts by the government and SBP to encourage inflows through official channels as well as limited cross-border travel due to the second wave of the COVID-19 pandemic, together with favorable foreign exchange market dynamics, the SBP mentioned.

According to SBP, with support of healthy home remittances inflows, the external sector continued to navigate the Covid crisis smoothly, as the current account posted a surplus in Q1-FY21 after a lapse of 21 quarters. The surplus was largely attributed to a noticeable increase in workers' remittances and a sharp fall in services imports.

Travel restrictions also helped divert workers’ remittances from informal to formal channels, continued policy measures under the Pakistan Remittance Initiative (PRI) and the promotion of formal and digital channels had a major role as well. Thus, workers’ remittances exceeded US$ 2 billion for the seventh consecutive month in December 2020, and contributed to the improvement in the current account balance.

Workers’ remittances also maintained notable growth month on month basis for the seventh consecutive month in December 2020. Pakistan is receiving home remittances inflows above $2 billion since June 2020.

According to SBP, remittances rose further to $2.4 billion in December 2020 compared to $ 2.09 billion in December 2019, growing by 16.2 percent on a year-on-year basis.

On a month-on-month basis, inflows of home remittances also posted an increase of 4.2 percent in December 2020 versus November 2020, in which some $2.338 billion remittances were arrived.

Remittance inflows have been well-diversified. Most of the inflows were sourced from Saudi Arabia, United Arab Emirates, United Kingdom and United States. Home remittances from Saudi Arabia surged by 24.6 percent to $3.955 billion during first half of this fiscal year as against $3.174 billion is corresponding period of last fiscal year.

During the period under review, remittance inflows from United Arab Emirates were $3 billion, United Kingdom $1.9 billion and United States $1.2 billion.

Copyright Business Recorder, 2021