During the fiscal year 2014-15 (from July to June), overseas Pakistanis have sent remittances of 18.4 billion US Dollars. This comes in as 16.5 percent increase year-over-year according to the numbers provided by the State Bank of Pakistan. Last year, remittances amounted to 15.8 billion US Dollars.
Overseas Pakistanis sent $1.8 billion in the month of June which was 9.5 percent higher than the previous month i.e. May 2015.
Most of the money was transferred from Saudi Arabia during the past year. Over $5.6 billion was moved to Pakistan during the 12 month period, an increase of about 19% compared to the previous year.
Remittances sent back home have risen by 16.5% compared to 2014
Inflows from the UAE increased even more and were up by 35.3 percent during the past year, boiling down to $4.2 billion during 2014-15. SBP data shows that the highest increase from major inflow providing countries was recorded from the UAE.
Remittances from the Gulf Cooperation Council (GCC) countries, excluding the UAE and Saudi Arabia, summed up to about $2.1 billion between July to June period.
Citizens in the United Kingdom transferred $2.3 billion, up by 4.9 percent, while Pakistanis from the United States sent $2.1 billion, up by 4.8 percent during the past year. This translates to an increase of 15.6 percent over the preceding fiscal year.
Major contributors from the GCC were from Oman, Bahrain, Qatar and Kuwait accounting to $666.8 million, $389 million $347.5 million and the highest $748.1 million of the total amount respectively.
The Gulf states account for 65% of all the remittances sent back to Pakistan
Oil and Pakistan
Any major fallout of the oil price slump on the remittance inflows will be detrimental for the Pakistani economy. Absent remittances, a perennial balance of payment crisis would be inescapable, as they cover up usually around 90% of the country’s trade deficit.
“The good news is that despite the oil slump, the GCC is still spending on infrastructure … there are no short-term concerns for remittances inflows into Pakistan from this region,” the SBP said in its second quarterly report.
Saying that the GCC governments’ spending plans have not been affected by declining oil prices due to the large sovereign funds, the SBP noted the status quo may not continue “much longer”.
“A continuous depletion of these reserves would eventually start biting into their fiscal spending if oil prices fail to recover. The pace of Pakistan’s remittance growth cannot remain immune to the oil slump indefinitely,” the SBP said.
Remittances received from Norway, Switzerland, Australia, Canada, Japan and ‘other countries’ during June amounted to $110.53 million, up 7.7% from the remittances received from these countries in the same month of 2013-14. The monthly average of remittances during 2014-15 remained $1.5 billion, up from the monthly average of remittances amounting to $1.3 billion received in July-June of 2013-14.
Remittances in the first six months of the current fiscal year increased regardless of the strong wave of political instability that began in August with sit-ins by opposition parties and fizzled out after the attack on Army Public School in December. Overseas Pakistanis sent remittances amounting to $8.98 billion in the first half of 2014-15, showing a year-on-year increase of 15.26%. Remittances had grown 13.7% in 2013-14, which means the year-on-year increase of 16.5% in 2014-15 was notably higher than preceding year.