Overseas workers' remittances amounted to $2.71 billion in July 2021, a 2.1% fall year-on-year, with the country's central bank pointing out that the figure has remained over $2 billion for the 14th straight month.
Data released by the State Bank of Pakistan (SBP) on Tuesday said that inflows of $2.71 billion were recorded in July 2021. This is the second-highest ever level of remittances reported in the month of July, it added.
In terms of growth, remittances increased 0.7% over the previous month ($2.68 billion in June 2021), and showed a decline by 2.1% over the same month last year ($2.76 billion in July 2020). This marginal year on year decline was largely on account of Eid-ul-Azha, which resulted in fewer working days this July compared to last year, said the SBP.
Remittance inflows during July 2021 were mainly sourced from Saudi Arabia ($641 million), United Arab Emirates ($531 million), United Kingdom ($393 million) and the United States ($312 million).
The central bank was of the view that proactive policy measures by the government and SBP to incentivise the use of formal channels, curtailed cross-border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions have positively contributed towards the sustained improvement in remittance inflows since last year.
Pakistan's remittances reach historic high of $29.4 billion in FY21
Remittances play an important part in Pakistan's economy that continues to battle widening trade and current account deficits. The country's trade deficit widened by 85.53% to $3.104 billion in July 2021 as compared to $1.673 billion in the corresponding month of 2020, said the Pakistan Bureau of Statistics (PBS).
According to trade data, the import bill in July this year went up 47.90% to $5.434 billion against $3.674 billion over the corresponding month last year. Meanwhile, the country’s exports witnessed an increase of 16.44% and remained $2.33 billion in July 2021 compared to $2.001 billion in July 2020.
July trade deficit widens by whopping 85.53pc YoY
The SBP's Third Quarterly Report on The State of Pakistan’s Economy for the fiscal year 2020-21, expected workers' remittances to remain buoyant, as the main factors (switch to formal channels, incentives for banks and MTOs, etc.) will still be in place.
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