Karachi, February 12, 2024 – The State Bank of Pakistan (SBP) reported on Monday that the inflow of workers’ remittances has witnessed a decline to $15.82 billion during the first seven months (July – January) of the fiscal year 2023-24.
This represents a 3 percent decrease compared to the $16.32 billion received during the same period in the fiscal year 2022-23.
Despite the overall dip, there is a silver lining as the remittances received in January 2024 exhibited a notable increase of 26 percent, reaching $2.40 billion in comparison to $1.90 billion in the same month of the previous year. Additionally, January’s remittances surpassed the $2.38 billion received in December 2023, reflecting a positive trend in the inflow of funds from overseas Pakistanis.
The breakdown of remittances during January 2024 indicates that the major contributors were Saudi Arabia ($587.3 million), the United Arab Emirates ($407.6 million), the United Kingdom ($362.1 million), and the United States of America ($283.4 million).
While the decline in the cumulative remittances over the seven-month period may raise concerns, the January surge suggests a potential rebound. Remittances play a crucial role in supporting the country’s foreign exchange reserves, contributing to economic stability, and aiding in the balance of payments.
The SBP has been closely monitoring remittance trends and implementing measures to facilitate and incentivize overseas Pakistanis to send funds through formal channels. The central bank’s efforts aim to enhance the transparency and efficiency of remittance transactions, ultimately discouraging the use of informal channels.
The decline in remittances over the seven-month period could be attributed to various factors, including global economic conditions, uncertainties arising from the ongoing pandemic, and potential shifts in migration patterns. However, the positive momentum observed in January signals resilience within the remittance sector, offering optimism for the months ahead.
The encouraging increase in remittances in January underscores the significance of timely and targeted policies to stimulate remittance inflows. Governments and financial institutions need to collaborate to create an environment conducive to increased remittance flows, ensuring a steady source of income for families and contributing to the overall economic growth of the country.
As the SBP continues its efforts to foster a remittance-friendly environment, the focus remains on leveraging technology, simplifying processes, and providing attractive incentives for overseas Pakistanis to utilize formal channels for sending money back home. The sustained support of the diaspora through legal and transparent channels is essential to building a resilient and thriving economy.
In conclusion, while the seven-month remittance data indicates a decline, the substantial surge in January serves as a positive indicator. The SBP’s strategic initiatives and the encouraging January figures emphasize the resilience of remittance inflows and highlight the importance of ongoing efforts to bolster this critical component of Pakistan’s economic landscape.
