KARACHI – The State Bank of Pakistan (SBP) reported a significant 27% growth in workers’ remittances during the first five months (July-November) of the current fiscal year (FY21), underscoring a resilient trend in foreign inflows facilitated through formal channels.
Data released by the central bank on Friday revealed that workers’ remittances surged to a remarkable $11.77 billion during this period, compared to $9.27 billion in the corresponding period of the previous fiscal year.
This substantial increase was attributed to several factors including the concerted efforts of the government and SBP to promote formal remittance channels under the Pakistan Remittances Initiative (PRI). Additionally, the rise in digital transactions amid restricted cross-border movements, stable exchange market conditions, and gradual recovery in global economic activities were highlighted as significant contributors to the sustained growth.
According to the SBP, workers’ remittances continued their robust performance in November, marking the sixth consecutive month where inflows remained above the $2 billion mark. In November 2020 alone, remittances reached $2.34 billion, marking a 2.4% increase from October 2020’s $2.28 billion and a substantial 28.4% rise from November 2019’s $1.82 billion.
On average, monthly remittances in FY21 were approximately $499 million higher compared to the same period in the previous fiscal year, reflecting a consistent upward trajectory.
Major contributions to remittance inflows during the first five months of FY21 were reported from Saudi Arabia ($3.3 billion), the United Arab Emirates ($2.4 billion), the United Kingdom ($1.6 billion), and the United States ($1.0 billion). These countries traditionally represent significant sources of remittance for Pakistan, underpinning the country’s foreign exchange reserves and supporting household incomes.
The sustained growth in remittances underscores their critical role in Pakistan’s economy, providing stability amidst global economic uncertainties exacerbated by the COVID-19 pandemic. The SBP’s ongoing initiatives to enhance transparency, reduce transaction costs, and incentivize remitters to use formal channels have evidently paid dividends, reinforcing confidence in remittance inflows.
Looking ahead, analysts anticipate continued resilience in remittance flows, albeit subject to global economic conditions and policy developments affecting migrant workers. The positive trend in remittances not only supports economic stability but also augurs well for Pakistan’s external sector dynamics in the near term.
The SBP and relevant stakeholders remain committed to further enhancing the efficiency and accessibility of remittance channels, ensuring sustainable growth in remittance inflows that contribute positively to the country’s economic growth and development goals.