KARACHI: Overseas Pakistanis sent $6.4 billion to the country in five months of this current fiscal year, helping the country protect its reserves from complete depletion, but the growth rate fell significantly compared to last two years.

The remittances are the backbone of economy, particularly for its external accounts which has been in a serious trouble for the last couple of years.

Bankers said their efficiencies played key role in mobilising remittances through banking channel.

However, they said despite increasing dependence on remittances, the new government is yet to announce incentives for a sustained growth in remittances.

Banking circles noted that export of labourers from Pakistan was much slower which may impact volume of remittances in next three to five years.

Remittances grew by 15pc during the five months of the last year while the State Bank reported on Tuesday that the five- month growth was slightly above 7pc.

Currency watchers and experts said the low growth in remittances should be a point of concern for the government whose dependence is increasing with the widening current account deficit and greater trade deficit.

The current account deficit for the first four months of the current fiscal year was $1.4bn while it was surplus with $14 million during the same period of last year.

Since the State Bank’s reserves fell to $3bn, the widening deficit is taken as warning by experts and bankers.

The State Bank reported that inflows from Saudi Arabia, UAE, and US increased during the period as remittances from these destinations stood at $1.79bn, $1.29bn and $1.02bn, respectively.

Experts said most of repayments to IMF have been made under the Standby Agreement while rest of money would be paid in small installments till 2015 which would not hit as badly as it did during the last two years.

Experts said the government should focus on export of workers abroad, particularly in the Arab countries and a detailed long-term strategy is required to strengthen the cheapest inflow of foreign exchange.

In the absence of new export policy, it seems that the government is settled with the current pace of export growth which would continue to widen the trade deficit, putting more pressure on the exchange rate and ultimately devalue the local currency.