KARACHI: The country received over $30 billion in remittances in FY24, showing an increase of 10.7 per cent over the last fiscal year, while inflows for last month jumped by 44pc year-on-year, the central bank reported on Tuesday.
The country received almost $3bn more than the receipts for last year, but it was still below the record inflows of $31.3bn in FY22. The growth in remittances has already exceeded the earnings from exports, reflecting the increasing dependence of the economy on overseas Pakistanis.
According to the State Bank, the total remittances in FY24 were $30.3bn, compared to $27.3bn in FY23. Financial experts said the growth is satisfactory for the government since it follows another encouraging report that the current account deficit had come down to just $464 million during the first 11 months of FY24 (July 2023 to May 2024).
They cautioned, however, that the economy’s growing dependence on remittances could be disastrous, especially if exports start declining.
Exporters have been shouting against fresh taxes proposed in the budget, as well as against the relentless march of power rates, as the twin menace had made the cost of doing business uncompetitive in the international market.
Prime Minister Shehbaz Sharif said on Monday that the nation needed to “swallow more bitter pills” in order to secure IMF loans.
The SBP data shows that inflows were $3.2bn last month, compared to $2.187bn in June FY23, marking a jump of 44.4 per cent.
In May FY24 Pakistan received $3.242bn. The second half of FY24 was much better than the first half as inflows recorded a substantial rise.
The financial sector sees higher inflows as a sign of confidence in the economy, particularly the exchange rate stability which had remained stable for more than four months.
The inflows from almost all important destinations recorded an improvement and significantly increased, compared to the last fiscal year FY23.
The highest inflows of $7.424bn were received from Saudi Arabia, showing a growth of 13.6 per cent in FY24. This was against a decline of 15.8 per cent in FY23. The previous fiscal year, FY23, was the worst for Pakistan; it lost about $4bn in remittances compared to the preceding year.
The second highest inflows came from UAE, rising by 18.9 per cent to $5.534bn. In FY23 the remittances from the UAE posted a net decline of 20.4 per cent.
The inflows from the United Kingdom and the United States saw a growth of about 11 per cent, with inflows of $4.521bn and $3.531bn, respectively.
Receipts from the GCC countries and the European Union recorded a positive growth of 0.6 per cent and 12.7 per cent with inflows of $3.18bn and 3.53bn, respectively. Remittances from Italy showed an improvement of 16.5 per cent over FY23 with an amount of $978m.
Some analysts believe that remittances will rise further in the coming years as hundreds and thousands of Pakistanis leave the country for jobs.
Published in Dawn, July 10th, 2024
