Against the anticipations and expectations, remittances have rather been slow in FY20. Inflow of the foreign currency inflows from overseas Pakistanis have remained weak mostly due to weakness in the key sending economies like Saudi Arabia, UAE and the GCC.
However, according to the latest numbers by the central bank, inflow of foreign exchange from overseas residents has seen improvement from all countries including Saudi Arabia and UAE. Remittances from Saudi Arabia that have remained under pressure due to the kingdom’s economic crisis, weaker oil prices and the impact on jobs for foreigners, increased by over three percent, year-on-year; while the growth in inflows was better from UAE at 9.54 percent, year-on-year in November 2019. Remittances from Dubai that have largely remained sluggish since the beginning of FY20 also posted an increase of over 13 percent in November 2019. Overall, November inflows stood up by 9.35 percent year-on-year, where inflows from USA and UK continued their growth trajectory.
Though November inflows closed the gap in overall remittances in 5MFY20, it will take more than a month’s improvement for a significant improvement in on an overall basis. Remittances remained flat - up by only 0.18 percent, year-on-year – in 5MFY20, and the increase in absolute terms from all countries is insignificant to the growth seen in 5MFY19.
The coming months will have to see some acceleration in remittances to meet the annual target of $23 billion, which will largely have to come from government efforts, initiatives, tie up; and partially from the recent gradual currency appreciation in shape of more dollars sent home.