As expected, remittances from overseas Pakistanis saw a surge on May 24. However, the monthly inflows rose to record levels this time touching $3.2 billion. On a year-on-year basis, this was a robust growth of 54 percent. On a month-on-month basis, the rise in home remittances was equivalent to 15.3 percent.
A look at the monthly data by the SBP shows that remittances have been on a higher end in the last three months – March, April, and May 2024 – between $2.8-3.2 billion. Before that, the monthly remittances for the fiscal year 2024 were between $2-2.2 billion. While one of the reasons for improved remittance flows is certainly the stability in the currency exchange rate over the last few months, the monthly trend corresponds to the previous years’ monthly trend as well, where the most inflows are seen coming in and around Ramzan, Eid-ul-Fitr, and Eid-ul- Azha.
This is also explained by the fact that most of the growth is coming from UAE and Saudi Arabia, where most Pakistanis reside, and send back home money during the religious months and festivities.
Remittances from Saudi Arabia stood at around $820 million, and inflows from UAE stood at $670 million – incurring noticeable year-on-year growth and contributing 46 percent to the total remittances.
Overall, 11MFY24 remittances stood at $27 billion, up by 7.75 percent year-on-year. While the abovementioned factors have been leading the remittance growth in the country, the surge could also be explained by a higher number of people emigrating from Pakistan over the last year or so. A note by
Topline Research highlights the rise in remittances over the last few months and is also attributed to the improvement in confidence in the domestic economy ahead of the likely next tranche of the IMF loan program sometime soon.
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