Irshad Salim — Pakistani expatriate workers remitted $19.30 billion in FY17 (July to June), compared with $19.93 billion received during the same period in the preceding year — down 3% overall, but remittances coming from EU countries are continuously increasing.
Some analysts had estimated that the decline of remittances (aspecially from the Middle East) would range between 5 and 6 per cent this year alongwith the continuing decline in export revenues. “These factors could potentially trigger a balance of payments crisis,” said among economic experts.
Almost 70 percent of overseas Pakistanis worldwide population (8.5-9 million) live in the Middle East region.
An economic repriotization in Gulf countries – the major sources of employment for overseas Pakistanis contributing almost 65% of Pakistan’s earnings from remittances- due to reduced crude oil prices and a global economic slowdown have been the major causes of reduced remittances.
Experts had earlier warned that low crude oil prices will eventually hurt Pakistan’s remittances due to economic slowdown in the Gulf countries resulting in massive layoffs of foreign workers and as the region shifts towards non-oil economy hinged on localization, specialization, manufacturing.
According to data released by the State Bank of Pakistan on Monday, the flow of remittances coming from Saudi Arabia – the country that hosts the largest Pakistani expats (2.5 million) – has reduced by 8.4%, from $5.97 billion in FY16 to $5.47 billion during FY17.
The other notable decline was seen in remittances coming from the UK which declined by 9.36%, from $2.58 billion to $2.34 billion in FY17. Analysts blame the withdrawal of UK from the European Union (EU) in June 2016 as key reason – it resulted in the British pound losing its value against the rupee.
The lowest decline was witnessed in remittances coming from the UAE and the US – the other top two destinations for overseas Pakistanis. The country received $4.31 billion from the UAE in FY17, down just 1.27% from $4.36 in the last year. Similarly, $2.44 billion came from the US in FY17, down 3.22% from $2.52 billion in FY16.
Despite the global economic slowdown, remittances coming from EU countries are continuously increasing, data shows.
In FY17, Pakistan received $483 million from EU countries, up 15.5% compared with $418 million in FY16. In FY15, remittances from the EU had witnessed a jump of 14.7% as well.
All other major countries including Norway, Switzerland, Australia, Canada and Japan also showed a significant jump in FY17 compared with last year. Other Countries, excluding major economies also showed sizable increase of 22% from $1.19 billion to $1.46 billion.