Pakistan sees remittances dipped to $24.83bn in 11MFY23
Business
Gulf States remain main source of transferring much-needed money
LAHORE (Web Desk) – Pakistan experienced a 13 per cent decline in remittances' inflow during the July-May period of 2022-23 when compared with the corresponding period of last year [2021-22] due to multiple factors ranging from record-high inflation and the better exchange rate offered by black market.
According to the State Bank of Pakistan (SBP), the amount received during the period under consideration stood at $24.83 billion against the previous level of $28.49bn, representing a $3.66bn reduction.
When it comes to the month-on-month comparison, the remittances in May fell to $2.10bn against $2.20bn in April.
Workers’ remittances recorded an inflow of US$2.1 billion during May 2023. For detail see https://t.co/rPOvn9Dr8Nhttps://t.co/7XBd4uOcHC#SBPRemittances pic.twitter.com/lcIkvd4K6f
— SBP (@StateBank_Pak) June 13, 2023
This decrease is basically triggered by the high inflation and economic slowdown in host countries, forcing the expats to tighten their belt.
But the huge difference in exchange rate between the official and the open market means that the more people are inclined to use unofficial mode of transfer – hawala and hundi – giving a boost to the black market.
Read more: Remittance income plunge 12pc in first ten months of current fiscal year
That’s reducing the difference between the official and open market exchange rates is a must to curb black market and hoarding.
It is this background that forced the government to introduce a law to curb the trend of hoarding US dollar and other important foreign currencies, which says any person or organisation involved in the practice would face imprisonment and fine.
Read more: Govt introducing law to punish those who hoard foreign currencies
A region-wise comparison shows that most the largest share of the remittances continues to come from the Gulf Cooperation Council (GCC) countries, which is quite opposite to the general impression spread through social media and other means of communication.
So it isn’t surprising that Saudi Arabia is the largest contributor in the overall home remittances inflows. But the share fell by 16pc to $6bn in the July-May period this fiscal year from $7bn in 2021-22.
As far as other countries are concerned in the first 11 months this fiscal year, remittances from the UK stood at $3.711bn with an 8pc dip, United States $2.8bn (1pc increase) and UAE $4.32bn (19pc decline). Similarly, inflows from the EU fell by 7.7pc to $2.8bn.
