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Tag: remittances

  • Remittances to remain strong for financing trade deficit: finance ministry

    Remittances to remain strong for financing trade deficit: finance ministry

    ISLAMABAD: The ministry of finance on Monday hoped the inflows of remittances to remain strong enough to support the financing of the trade deficit in coming months.

    In its monthly economic update and outlook – January 2021, the ministry said that the sudden surge in imports due to the increase in international oil prices and import of additional food products enhanced imports by $ 1.2 billion alone in December 2020 ($ 5.0 billion) compared to December 2019 ($ 3.8 billion).

    “However, there was no pressure on foreign reserves as Current Account remained in surplus for H1 FY 2021. Looking forward, depending on these explanatory factors, imports may remain $ 4.5 – $ 5.0 billion in next month,” the ministry said.

    Exports are expected to stabilize around current levels, it added.

    “But in the baseline scenario, the trade balance is not expected to further deteriorate. Remittance inflows remain strong and continue to provide strong support to the financing of the trade deficit,” the ministry said.

    The finance ministry said that Pakistan’s economy consecutively suffered from Balance of Payment (BOP) crisis and COVID-19 pandemic kept economy below its potential level.

    Since the start of current fiscal year, economy has started recovering. The government is committed to monitor external balance and its financing closely.

    Furthermore, the government has also taken policy and administrative measures to monitor the supply and market functioning wherever necessary to mitigate inflationary pressure.

    The restoration and acceleration of Pakistan’s productive capacity is a necessity to ensure a high and sustainable growth in the near and longer term. In the near future, the economic recovery is expected to translate into more productive investment expenditures.

    The government is committed to motivate investments in crucial sectors of the economy to enhance productive capacities and to stimulate economic growth.

    Fiscal performance remained satisfactory. Currently, the fiscal policy actions are primarily concentrated on relief measures to support businesses stay afloat and to protect vulnerable segments of society.

    At the same time, the government is focused on containing the fiscal deficit at a manageable level and keeping the primary balance at a sustainable level.

    According to latest fiscal numbers, healthy growth in non-tax revenues, satisfactory performance of FBR tax collection despite issuance of higher number of refunds and controlling of expenditures other than mark-up payments and COVID related would pave the way to maintain the fiscal deficit within the reasonable limits in coming months, the ministry said.

    The finance ministry said that the current outlook ensures economic revival on the basis of continued recovery seen in recent months but there is possibility of slower economic activities especially in services sector depending on the intensity and duration of pandemic.

  • SBP launches survey to analyze trends in remittances

    SBP launches survey to analyze trends in remittances

    KARACHI: State Bank of Pakistan (SBP) on Thursday launched a survey of Overseas Pakistanis to analyze recent trends in remittances and the future outlook.

    The central bank launched the survey in collaboration with Ministry of Planning, Development and Special Initiatives (MPD&SI).

    The survey will be available to all Overseas Pakistanis globally till January 9, 2021.

    The survey attempts to assess underlying factors that may have affected recent remittances behavior, including switching from informal to formal channels, from brick and mortar outlets to digital platforms, future plans of moving back to Pakistan, as well as the amount of remittances they expect to send in the next six months.

    With the support of the Ministry of Overseas Pakistanis and Human Resource Development (MOPHRD), Ministry of Commerce, Ministry of Foreign Affairs (MOFA) and Pakistan Remittance Initiative (PRI), this survey is being conducted simultaneously at Pakistani Consulates and Embassies, Overseas Bank Branches of Pakistani Banks as well as online.

    SBP and MPD&SI encourage Overseas Pakistanis to actively participate in this short online survey. The survey is very easy to access through the following web link: https://surveyctosbp.surveycto.com/collect/survey_on_recent_remittance_behavior_of_overseas_pakistanis?caseid

  • Remittances grow 27 percent during July – November

    Remittances grow 27 percent during July – November

    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.

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  • Workers’ remittances increase by 26.5pc in July – October

    Workers’ remittances increase by 26.5pc in July – October

    KARACHI: The inflow of workers’ remittances has sharply increased by 26.5 percent to $9.43 billion during first four months (July – October) of current fiscal year 2020/2021, State Bank of Pakistan (SBP) said on Thursday.

    The central bank received $7.45 billion in the same months of the last fiscal year.

    The SBP said that remittances remained above $2 billion for the fifth consecutive month in October 2020.

    Workers’ remittances amounted to $ 2.3 billion during October 2020, increasing by 14.1 percent compared to October 2019.

    A large part of y/y increase in October 2020 was sourced from Saudi Arabia (30 percent), United States (16 percent) and United Kingdom (14.6 percent).

    Improvements in Pakistan’s FX market structure and its dynamics, efforts under the Pakistan Remittances Initiative (PRI) to formalize the flows contributed to the growth in remittances and limited cross-border travelling, the SBP said.

  • Remittances grow 31.2 percent in September: SBP

    Remittances grow 31.2 percent in September: SBP

    KARACHI: The inflow of workers’ remittances has registered sharp increase of 31.2 percent after making fourth consecutive month of over $2 billion received in September 2020.

    The State Bank of Pakistan (SBP) on Monday said that the remittances increased to $2.3 billion, 31.2 percent higher than the same month last year and 9 percent higher than in August 2020.

    Workers’ remittances remained above $2 billion for the fourth consecutive month in September, the central bank said.

    On a cumulative basis, remittances rose to a record $ 7.1 billion in first quarter of current fiscal year, 31.1 higher than the same period last year.

    The level of remittances in September was slightly higher than SBP’s projections of $2 billion.

    Efforts under the Pakistan Remittances Initiative (PRI) and the gradual re-opening of major host destinations such as Middle East, Europe and United States contributed to the sustained increase in workers’ remittances.

    Prime Minister Imran Khan earlier in his tweet said: “Despite COVID more good news for our economy. Alhamdulillah, remittances from our hardworking overseas Pakistanis rose to $2.3 billion in September 2020, 31 percent higher than last September and 9 percent higher than August 2020. This marks the fourth consecutive month that remittances have remained above $2 billion.”

  • Workers’ remittances surge by 31pc in July – August

    Workers’ remittances surge by 31pc in July – August

    KARACHI: Workers’ remittances to Pakistan have experienced a significant boost, surging by 31% during the first two months of the current fiscal year. This sharp increase is attributed to initiatives by the State Bank of Pakistan (SBP), which have facilitated the inflow of remittances from Pakistani workers abroad.

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  • Remittances hit monthly record high: SBP

    Remittances hit monthly record high: SBP

    KARACHI: The inflow of workers’ remittances hit monthly record high of $2.77 billion in July 2020, State Bank of Pakistan (SBP) said on Monday.

    In July, workers’ remittances rose to US $ 2.768 billion. “This is the highest ever level of remittances in a single month in Pakistan,” the SBP said.

    In terms of growth, remittances increased by 36.5 percent over July 2019 (y/y) and 12.2 percent over June 2020 (m/m). Given the impact of Covid-19 globally, this increase in worker’s remittances is encouraging.

    In July, sizeable amounts of workers’ remittances were received from Saudi Arabia (US $ 821.6 million), UAE (US $ 538.2 million), UK (US $ 393.9 million) and USA (US $ 250.6 million).

    The growth rate in remittances compared to the same month in the previous year is around twice as high as the Eid-ul-Adha related seasonality typically experienced over the last decade.

    Several factors have likely supported the growth in remittances to date, including orderly exchange rate conditions and policy steps taken by the State Bank and the Federal Government under the Pakistan Remittance Initiative. These steps include reducing the threshold for eligible transactions from USD 200 to USD 100 under the Reimbursement of Telegraphic Transfer (TT) Charges Scheme, an increased push towards adoption of digital channels, and targeted marketing campaigns to promote formal channels for sending remittances.

    To improve data quality and better capture the source country of the remitter, the compilation methodology for ‘country wise’ workers’ remittances has been strengthened from this month. Therefore, country-by-country trends will be available on a consistent basis from August 2020 onwards.

    Importantly, the new data collection method does not affect the reporting of the level of remittances arriving into Pakistan.

    Importantly, the revised country shares under the improved data do not necessarily imply that remittances from one country have increased over another. Instead they demonstrate that the source country of remittances is being recorded more accurately now.

  • Banks, exchange companies no more required to give details of remittances sent abroad for education

    Banks, exchange companies no more required to give details of remittances sent abroad for education

    ISLAMABAD: Federal Board of Revenue (FBR) shall not ask banks and exchange companies to provide details of persons sending remittances abroad related to education.

    Through Finance Act, 2020, the Section 236R of Income Tax Ordinance, 2001 has been omitted. This section was introduced for collection of advance tax on education related expenses remitted abroad.

    This section was introduced through Finance Act 2015 under which banks, financial institutions, foreign exchange companies or any other person responsible for remitting foreign currency abroad shall collect advance tax at the rate of five percent from the payer of education related expenses.

    Tax collected under the section was adjustable against the income of the person remitting payment of education related expenses.

    The section defined “education related expenses” as tuition fee, boarding and lodging expenses, any payment for distant learning to any institution or university in a foreign country and any other expense related or attributable to foreign education.

    This section was an important source of gathering information of those persons having taxable income in Pakistan and sending foreign exchange abroad taking advantage of education expenses.

    Under Section 165 of Income Tax Ordinance, 2001, withholding agents are required to provide details of persons including CNIC, NTN and addresses, whose tax was deducted at the time of transaction.

    However, deletion of this section the banks and exchange companies would no more required to share details of persons who are sending foreign exchange abroad for education related expenses.

  • Remittances fall by 18.6 percent in May 2020

    Remittances fall by 18.6 percent in May 2020

    KARACHI: The inflow of workers’ remittance has registered 18.6 percent decline in May 2020 due to job losses and closure of borders due to coronavirus.

    The inflow of workers’ remittances was at $429.2 million in May 2020 as compared with $2.3 billion in the same month of the last year, showing decline of 18.6 percent, State Bank of Pakistan (SBP) said on Friday.

    During this pandemic situation, job losses of overseas workers and closure of international borders are the main factors affecting remittances’ flow. Moreover, in last year, the whole month of Ramadan fell in May 2019, the SBP said.

    During May 2020, workers’ remittances stood at $1,872.8 million, showing an increase of $82.8 million or 4.6 percent over previous month (April 2020, $1,790.0 million).

    Workers’ Remittances amounted to US $ 20,654.5 million during July – May FY20, up by 2.7 percent or US $ 551.5 million over July – May FY19 (US $ 20,103.0 million).

    Major contribution to workers’ remittances during May 2020 came from Saudi Arabia (US $ 436.2 million), USA (US $ 428.3 million), UAE (US $ 323.4 million) and UK (US $ 284.8 million) recording an increase of 25.7 percent and 6.6 percent for UK and USA respectively whereas a decrease of 3.4 percent and 8.6 percent for Saudi Arabia and UAE respectively as compared to April 2020.

  • Inflows of remittances registers 5.5 percent decline in April

    Inflows of remittances registers 5.5 percent decline in April

    KARACHI: The inflow of workers remittances has registered decline of 5.5 percent in April 2020, State Bank of Pakistan (SBP) said on Monday.

    Workers’ remittances during April 2020 amounted to US $ 1.79 billion recording a decrease of US $ 104.4 million or 5.5 percent over remittance received during previous month (March 2020, US $ 1.89 billion).

    The workers’ remittances received during July – April FY20 amounted to US $ 18.78 billion recording an increase US $ 980.6 million or 5.5 percent over remittances received during July – April FY19 (US $ 17.8 billion).

    The remittances during April 2020 (US $ 1,790.0 million) increased by US $ 19.8 million or 1.1 percent over remittance received during corresponding month of FY 19 (US $ 1,770.2 million).

    During April 2020, larger amounts of Workers’ Remittances are received from Saudi Arabia (US $ 451.4 million), USA (US $ 401.9 million), UAE (US $ 353.8 million) and UK (US $ 226.6 million) recording an increase of 14.0 percent for USA whereas a decrease of 0.2 percent, 15.8 percent and 8.8 percent for Saudi Arabia, UAE and UK respectively as compared to March 2020.