KARACHI: The flow of remittances sent by overseas Pakistanis to the country rose to an all-time monthly high of $2.8 billion in April, 56 per cent higher than the inflow during the same month of previous fiscal, the State Bank of Pakistan (SBP) reported on Tuesday.

Since the beginning of the fiscal 2021, the monthly remittances remained over $2bn which enabled the country to receive record over $24bn in the 10 months of the current fiscal while it also helped the country keep the current account surplus, the biggest achievement on external front of the economy.

According to the SBP, the remittances during the first 10 months of the current fiscal have crossed the remittances received during entire fiscal of FY20.

During July-April FY21, the country received $24.2bn remittances, showing a growth of 29pc compared to the remittances in the same period of the previous fiscal. “On a cumulative basis, remittances have also surpassed previous records and have already crossed the full FY20 level by more than $1 billion,” said the SBP.

PM thanks expatriates for sending $24.2bn during first 10 months of current fiscal

In the 10 months of FY21, exports increased by 13.5pc to $20.88bn against $18.4bn in the same period of last fiscal, showing no big jump like remittances despite continued support by the government and the State Bank.

However, the record remittances helped mitigate negative impact of increasing trade deficit due to higher import bills. The trade deficit widened by 21.6pc to $23.83bn in the first 10 months of FY21. The import bill during the 10 months jumped by 17.7pc to $44.7bn compared to $37.9bn in the previous fiscal.

However, despite this discouraging increase in the trade deficit, the unexpected high growth of remittances supported the current account to remain surplus with $959 million till the end of third quarter of FY21.

The highest remittances were received from Saudi Arabia which increased by 20pc to $6.4bn, contributing almost about 26pc to the total remittances during the 10 months. Recently Prime Minister Imran Khan visited the Kingdom and announced that the volume of trade with the country would be increased, which was taken as a sign of improved relations between the two countries.

Thought the growth was just about 8.4pc in remittances from the United Arab Emirates (UAE), the amount was the second highest as it reached $5.075bn during the 10 months.

The highest growth of 68pc was noted in the inflows from the UK against 28pc decline in the same period of last fiscal. The remittances from the UK rose to $3.33bn. Similarly, the inflow from the United States jumped by 58.4pc to $2.216bn compared to 48.3pc decline in the same period of last fiscal. Both the UK and US were in strong grip of Covid-19 during the last fiscal while the situation has now improved in both countries.

The inflows from other than Gulf countries increased by 12.6pc compared to the high growth of 42.5pc in the same period of last fiscal. Pakistan received $2.755bn from these countries.

The inflows from the European Union have increased significantly during the last couple of years as it increased by 54.4pc during the 10 months of this fiscal while it jumped by 192pc in the same period of last fiscal. Pakistan received $2.193bn from EU countries.

The inflows from Australia and Canada also showed a growth of 95.5pc and 96pc, respectively, during the 10 months while the inflows were $497m and 464m, respectively.

“Proactive policy measures by the Government and SBP to encourage more inflows through formal channels, curtailed cross border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, orderly foreign exchange market conditions and, more recently, Eid-related inflows have contributed to record levels of remittances this year,” said the SBP.

Meanwhile, Prime Minister Khan has thanked the overseas Pakistanis for sending record remittances of $24.2bn during the first 10 months of fiscal 2021.

The prime minster took to Twitter to thank the expatriates for “showing faith in Naya Pakistan”.

“I have always believed Overseas Pakistanis to be our greatest asset Thank you for your faith in Naya Pakistan,” he said.

The prime minister noted that in April, the remittances by overseas Pakistanis rose to an all-time high of $2.8bn.

“Remitting $24.2bn in first 10 months of FY21, you have broken the record level achieved in entire FY20,” Mr Khan said.

Published in Dawn, May 19th, 2021