Remittances to Pakistan to reach an all-time high of $28bn this year: report

This will be a massive year for remittance inflows to Pakistan. According to a recent report on the nation’s economy, Pakistan is expected to receive record remittances of up to $28 billion this year, with more than 50% of it to be contributed by overseas Pakistanis residing in Saudi Arabia and the United Arab Emirates.

According to details from a report by Zawya, Pakistan can expect to cross the milestone of $28 billion this year in terms of total remittance inflows to the country. This prediction has largely been motivated by governmental and central bank reforms to facilitate overseas workers, which has already started yielding positive results despite the challenges posed by the COVID-19 pandemic.

Pakistan received remittances amounting to $14.203 billion during the first half of the financial year 2020-21, which when compared to last year’s growth during the same period of $11.37 billion, represents a surging growth rate of 24.9 percent. In fact, this is the highest half-yealry growth in remittances that the country has witnessed since the financial year 2006-07.

“This strong growth in workers’ remittances is attributable to the increased use of formal channels on the back of sustained efforts by the government and State Bank of Pakistan to encourage inflows through official channels,” said the central bank in a statement.

Overseas Pakistanis working and residing in Saudi Arabia and the UAE continue to be strong contributors to remittance inflows to Pakistan.

Workers residing in Dubai sent 5.6 per cent more money back home, as they remitted $2.45 billion during the first half of fiscal year 2020-21. Overseas Pakistanis in Abu Dhabi and Sharjah sent $418.4 million and $34.5 million in remittances, respectively, showing an increase of 5.6 per cent and one per cent.

Similarly, remittance inflows from Saudi Arabia also recorded a significant increase during the first half of fiscal year 2020-21. Overseas Pakistanis remitted $3.96 billion, compared to $3.17 billion in the corresponding period last year, which represents a growth rate of 24.6 percent.

Aside from the Gulf region, remittances from the United Kingdom and United States also reached new heights, with the former contributing $1.88 billion (51.7 percent growth over last year) and the latter contributing $1.2 billion (47.5 percent growth rate over the previous year).

Considering the fact that December 2020 marked the sixth month in a row that remittances flowing into the country crossed the $2 billion mark over the course of a month, the nation’s economy can be expected to return to positive growth levels this year.