KARACHI: Remittances increased one per cent to $4.79 billion in July-September on a year-on-year basis, the State Bank of Pakistan (SBP) reported on Tuesday.

However, inflows amounted to $1.29bn in September, down 33.8pc from August.

The nominal growth recorded in the first quarter of 2017-18 is in sharp contrast with an increase of 13pc registered in July-August.

Remittances from the Arab countries, which are the largest source of remittances, showed no positive sign.

The monthly decline in September was most notable in inflows from Saudi Arabia, which is still the largest source of remittances for Pakistan. Inflows from the kingdom declined 7.2pc year-on-year to $1.23bn in the first quarter. Remittances from the same country registered a decline of 8.1pc in 2016-17.

Inflows in September decreased 34pc on a monthly basis

In September, inflows from the kingdom fell 39pc to $308m from the preceding month.

Although remittances from the United Arab Emirates in the first quarter showed an annual improvement of 0.2pc to a little over $1bn, inflows in September fell 31pc on a month-on-month basis.

The highest increase was noted in remittances from the United Kingdom. They increased 17pc in the first quarter on a year-on-year basis to $642m.

However, remittances from the kingdom in September fell to $194m from $249m in August.

Another important source of remittances is the United States from where inflows went up 2pc to $625m in the first quarter. But inflows fell in September to $171m from $260m in August.

First-quarter figures are not discouraging for the government, but the overall trend in September should worry economic managers.

The external sector is already in bad shape due to the erosion of foreign exchange reserves and a growing current account deficit.

Pakistan largely failed to export manpower to the Arab region during the last year or so apparently because of the poor economic conditions in the Gulf countries. In addition, Arab governments are also sending back foreign nationals to save jobs for their local population.

Published in Dawn, October 11th, 2017