- This is the highest amount of inflow recorded in a single month
- Inflow up 11.2% on a monthly basis, 11.9% on a year-on-year basis
Monthly remittances from overseas workers crossed $3 billion for the first time in Pakistan's history, as inflow of $3.125 billion were recorded during April 2022, revealed data released by the State Bank of Pakistan (SBP) on Friday.
In terms of growth, remittances increased 11.2% on a month-on-month basis, and 11.9% on a year-on-year basis.
Cumulatively, at $26.1 billion, remittances grew by 7.6% during 10 months of FY22 compared to the same period last year. Saudi Arabia was the largest contributor to workers’ remittances with $6.517 billion during July-April FY22, up from $6.412 billion in same period last fiscal year. From the UAE, remittances amounted to $4.898 billion, while an inflow of $3.671 billion was recorded from the UK, and another $2.556 billion from the US.
On a monthly basis, inflows were mainly sourced from Saudi Arabia ($707 million), United Arab Emirates ($614 million), United Kingdom ($484 million) and the United States of America ($346 million).
The development comes at a crucial time for Pakistan, which has seen its foreign exchange reserves deplete due to external debt servicing and lower inflow of dollars. According to the latest data, reserves held by the SBP decreased another $190 million to $10.31 billion, said the central bank on Thursday, with the level staying at less than 1.5 months of import cover.
Earlier this month, the SBP, under its home remittances promotion measures, allowed Exchange Companies (ECs) to maintain separate foreign currency accounts for each Money Transfer Operator (MTO).
In February, the government decided to provide an incentive of Re1 for each US dollar of home remittances surrendered in the inter-bank market provided that the ECs surrender 100% of the foreign exchange received as inward home remittances.
Meanwhile, the World Bank has projected a slowdown in remittances to Pakistan and estimated it to grow at 8% to $34 billion in 2022 compared to $31 billion in 2021, which grew at 20 percent.
The bank, in its latest report, 'Migration and Development Brief, A War in a Pandemic Implications of the Ukraine crisis and COVID-19 on global governance of migration and remittance flows', stated that the remittance outlook for South Asia in 2023 is highly uncertain. While high-frequency data for all countries except India show growth in remittances slowing in South Asia, it is unlikely that the strong growth in remittances in South Asia in 2020 and 2021 can be sustained through 2023.