Remittances sent back home from overseas Pakistanis continue to slide. Remittances during November 2022 declined by 14.3 percent year-on-year, and the month-on-month decline stood at 4.8 percent. With cumulative inflow of $12 billion during Jul-Nov 2022, the remittances decreased by 9.6 percent in the first five months of FY23 as compared to the similar period last year.
Country-wise, remittances showed a decline from key destinations excluding the United State of America showed a growth of seven percent year-on-year in November. Remittances from Saudi Arabia, the major contributor to remittances in Pakistan continued to show a decline, which stood around 20 percent during Nov-22. Inflows from UAE also fell by 20 percent year-on-year, while those from the UK and EU fell by around 5 and 8 percent year-on-year, respectively. And remittances from the USA that had remained up in the previous months also declined by 6 percent year-on-year in Nov-22. . .
Even though the remittances are still above the pre-pandemic levels, these monthly inflows have continued to taper off in recent months.
The reasons have been highlighted in the space with recession in the European and western countries and re-emergence of illegal channels key factors behind the decline. The hawala and hundi mechanism especially in remittances flow from Saudi Arabia and UAE particularly show that illegal channels are rife. Other factors include the control in oil prices in recent months and the stabilization of the domestic currency as highlight by JP Morgan in its Asia Pacific Economic Research recently released.
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