Inflow of overseas workers’ remittances clocked in at $2.1 billion in August 2023, 3.1% higher on a month-on-month basis when compared to $2.03 billion in July 2023, showed data released by the State Bank of Pakistan (SBP) on Monday.

On a yearly basis, the monthly inflow of remittances registered a decline of 24% as it stood at $2.7 billion in the same month of the previous year, data showed.

Home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing disposable incomes of remittance-dependent households.

Workers’ remittances inflow of $4.1 billion has been recorded during July-August FY24, reflecting a decline of 22% YoY or $1.13 billion, as compared to $5.3 billion registered in 2MFY23.

Last month, the Economic Coordination Committee (ECC) of the Cabinet approved the SBP’s proposal with respect to changes in the contours of six incentives in order to improve remittances inflow and get optimal remittance inflow through formal channels.

Breakdown of remittances

Overseas Pakistanis in Saudi Arabia remitted the largest amount in August 2023 as they sent $490.1 million during the month. The amount improved by 1% on a monthly basis, but was nearly 29% lower than the $692.6 million sent by expatriates in the same month of the previous year.

Inflows from the United Arab Emirates (UAE) reduced by 2% on a monthly basis, from $315.5 million in July to $308 million in August. However, a much more pronounced decline of 43% was witnessed on a yearly basis, as compared to $540.4 million reported in same month last year.

Remittances from the United Kingdom amounted to $331.3 million during the month, a decline of 10% compared to $369.7 million in August 2022.

However, remittances from the European Union improved 4% year-on-year as they amounted to $290.4 million in August 2023. Overseas Pakistanis in the US sent $262.4 million in August 2023, a year-on-year decline of 12%.