JUL 12, 2018: The country missed home remittances target of $20.7 billion for the fiscal year Jul 2017-Jun 2018 (FY18). The State Bank of Pakistan (SBP) Tuesday reported that overall, overseas Pakistani workers remitted $19.6 billion during FY18 compared with $19.351 billion received during the same period in the preceding year (FY17), showing a growth of 1.4 percent.
Although remittances in FY18 are higher than previous year, but less than the actual target of $20.7 billion set by the federal government for the last fiscal year. Economists said a major decline has been witnessed from Saudi Arabia – Pakistan’s largest remittances corridor. However, the decline in home remittance inflows from Saudi Arabia has been offset by higher inflows from other countries, particularly advanced western economies.
According to SBP, remittance inflows from the US and the UK increased by 11 percent and 18 percent respectively, during last fiscal year. Home remittance inflows amounting to $2.714 billion arrived from the US and some $2.763 billion from the UK during FY18.
On the contrary, workers’ remittance inflows from Saudi Arabia declined by 11 percent to $4.858 billion in FY18 against $5.469 billion arrived in FY17.
Pakistan remittance growth also remained almost flat during FY2017 majorly due to notable decreases in inflows from Saudi Arabia (the biggest remittance source) by end of the year, according to the World Bank report.
Remittances into Pakistan constituted 7 percent of gross domestic product (GDP) for 2017.
World Bank attributed this to labor market nationalization policies in Saudi Arabia and this trend continued into early 2018. However, remittance flows from UAE, United States and the United Kingdom soared, it said.
“Deployments of Pakistani workers to Saudi Arabia in the first six months of 2017 was just 17 percent of the total workers who went to the kingdom in 2016 (77,600 in January–June 2017 vs. 462,598 in 2016). The Kingdom recently placed restrictions on the recruitment of 12 categories of foreign workers,” said World Bank.