Karachi, January 10, 2024 – Pakistan experienced a significant 7 percent decline in the inflow of workers’ remittances during the first half (July – December) of fiscal year 2023-24, according to official data released by the State Bank of Pakistan (SBP) on Wednesday.
The remittances amounted to $13.43 billion during this period, down from $14.42 billion in the corresponding period of the previous fiscal year.
Analysts attribute the fall in remittances to the volatile exchange rate earlier in the ongoing fiscal year. However, a concerted effort by the government and the SBP to stabilize the rupee has resulted in recent growth in the inflow of workers’ remittances.
The State Bank of Pakistan disclosed that the crackdown initiated by the government, combined with strategic measures taken by the SBP, has contributed to maintaining rupee stability. This, in turn, has positively influenced the remittance inflows, offering a more favorable environment for overseas workers to send funds back to Pakistan.
In December 2023, the inflow of workers’ remittances witnessed a notable 12 percent growth, reaching $2.38 billion compared to $2.10 billion in the same month the previous year. Similarly, there was a 4 percent growth in remittances when compared with November 2023, recording $2.38 billion against the $2.26 billion received in the preceding month.
The improved performance in recent months suggests that the measures taken by the government and the SBP are yielding positive results. The stability in the exchange rate and the growth in remittances indicate a potential turnaround in the trend witnessed during the earlier part of the fiscal year.
Remittances play a crucial role in supporting Pakistan’s economy, providing a significant source of foreign exchange. The decline in the first half of the fiscal year raised concerns, but the recent positive trajectory offers optimism for the remainder of FY24.
It is worth noting that remittances are vital for millions of Pakistani families, contributing to household income, investment, and overall economic stability. Any fluctuations in remittance inflows can impact the economy at various levels, making it a key indicator to monitor for policymakers and analysts.
As Pakistan navigates economic challenges and strives for stability, the resilience and growth in remittance inflows present a positive development. Continued efforts to sustain this positive momentum will be crucial for ensuring the stability and growth of the country’s economy in the coming months. Analysts recommend vigilance and proactive measures to address any potential challenges that may affect the remittance landscape in the future.
