Karachi, July 10, 2023 – Workers’ remittances flowing into Pakistan have experienced a significant decline of around 14%, amounting to $24.02 billion in the fiscal year 2022-23, according to official data released by the State Bank of Pakistan (SBP) on Monday.
In the preceding fiscal year, workers’ remittances recorded an inflow of $31.28 billion, making the current decline a substantial blow to Pakistan’s external sector, posing challenges for the balance of payments.
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The decrease in workers’ remittances exacerbates the already existing shortage of foreign currency in the country, further amplifying the economic difficulties faced by Pakistan.
The United Arab Emirates (UAE) witnessed the most significant decline in inflows of workers’ remittances, with a drop of over 20% during the fiscal year. Remittances from the UAE amounted to $4.65 billion in the fiscal year 2022-23, compared to $5.85 billion in the previous fiscal year.
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Similarly, expatriate Pakistanis residing in Saudi Arabia sent $6.45 billion during the fiscal year 2022-23, marking a decline of 17% compared to $7.75 billion in the previous year.
The United Kingdom (UK) also experienced a decrease in remittances, with a 9.7% decline to $4.06 billion in the fiscal year 2022-23, as compared to $4.5 billion in the preceding fiscal year.
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Conversely, the inflow of remittances from the United States of America (USA) remained relatively stable, remaining at $3.09 billion in the fiscal year 2022-23, similar to the preceding fiscal year’s figure of $3.1 billion.
In the month of June, the inflow of workers’ remittances witnessed a substantial decrease of 22% to $2.18 billion, compared to $2.79 billion in the same month of the previous year.
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The decline in remittances poses significant challenges for Pakistan’s economy, as it heavily relies on these inflows to support the country’s foreign exchange reserves and meet its external payment obligations.
Efforts to address the decline in remittances and attract more overseas workers’ contributions will be crucial for Pakistan’s economic stability and growth.
