January 19, 2006	Thursday	Zilhaj 18, 1426

KARACHI, Jan 18: The half-yearly inflow of workers’ remittances will provide a significant cushion to the government while dealing with the widening trade deficit problem, as workers’ remittances during the first half of the current fiscal year increased by over five per cent.

The latest data issued by the State Bank here on Wednesday showed that overseas workers remitted $2.055 billion during the July-December 2005 period as compared to $1.946 billion in the corresponding period last year, showing an increase of 5.6 pre cent.

The inflow of remittances during the first half of the current fiscal year from the US, Saudi Arabia, UAE, GCC countries (Bahrain, Kuwait, Qatar and Oman), the UK and EU countries amounted to $586.04 million, $335.24 million, $301.79 million, $276.79 million, $201.68 million and $57.47 million, respectively, as compared to $587.89 million, $300.36 million, $315.47 million, $248.02 million, $179.18 million and $47.47 million during the corresponding period of the last fiscal year. Remittances received from Canada, Australia, Norway, Switzerland, Japan and other countries stood at $286.20 million as compared to $264.53 million during the corresponding period last fiscal year.

The monthly average remittances for the period under review stood at $342.53 million as compared to $324.36 million during the same period a year ago.

In December 2005, the inflow of remittances into Pakistan from most of the countries increased as compared to December 2004. The workers during the last month remitted $371.24 million as against $336.38 million in December 2004.

According to the break-up, Pakistan received remittances during December 2005 from the US ($104.50 million), the UAE ($58.53 million), Saudi Arabia ($54.35 million), GCC countries ($48.54 million), the UK ($28.90 million) and EU countries ($9.71 million) as against $99.06 million, $57.66 million, $49.86 million, $42.38 million, $32.01 million and $7.79 million during December 2004. Remittances received from Canada, Australia, Norway, Switzerland, Japan and other countries during December 2005 amounted to $64.57 million as compared to $47.14 million during the same month last year.

At the beginning of the fiscal year, the government assessed that total remittances would be less than $4 billion and the estimate was taken as optimistic by economists and analysts. However, the flow of remittances supported the government and the analysts now believe that total remittances by the end of the fiscal year in June 2006 would be more than $4.1 billion.

Though the higher inflows would provide comfort to the government to some extent, it could not change the challenging problems of unexpected huge trade deficit and balance of payments. The government may face a trade deficit in the range of $7 to $9 billion, which would definitely create a serious problem of balance of payment.