KARACHI: Pakistan received over $6 billion as remittances in the first four months of the current fiscal year, the State Bank reported on Thursday.
The rising trend of the remittances persists for the last four months with an increase of 15 per cent compared to the same period of last year.
The State Bank reported on Thursday that the remittance rose to $6.077bn during July-Oct compared to $5.275bn, about $802 million higher than the previous year.
The rising remittances have been a great source of encouragement for the government but the dependency is also increasing on a vulnerable source of foreign exchange.
Also, the gap between the inflows of remittances and export proceeds has been narrowing which means the export is not increasing the way the remittances do.
Highest rise in remittances was from UAE as inflows shot up by 27 per cent
In FY14 the country received total remittances worth $15.832bn while the export proceeds in the same year were $24.162bn. Though, the export proceeds are higher than remittances but the huge imports bill nullify the impact of enlarging remittances forcing the country to face the current account deficit.
In the month of September, the remittances were 33pc higher than the same month of last year while in the first month of the current fiscal year it was 17pc higher than the same month of the previous year.
In October the remittances were $1.383bn showing an increase of just 2pc compared to the same month of the last year. However, the rising trend of remittances was noted from the traditional sources like Saudi Arabia and Gulf States.
The highest increase in the remittances was noted from United Arab Emirates as the inflows shot up by 27pc in the first four months with a total amount of $1.350bn.
Saudi Arabia emerged as the largest source of remittances with a total amount of $1.721bn, an increase of 18pc compared to the same four months of last year.
Remittances from United States and United Kingdom were $905m and $824m with an increase of 6pc and 2pc, respectively.
State Bank and commercial banks have improved their performance while remitting from the overseas countries which brought almost all remittance under the banking channel.
However, the government has yet not come out with any plan for the benefit of the overseas Pakistanis which may help to increase their investments and ultimately increase the volume of remittances.
In the wake of shrinking foreign investment, the remittances have become more important than ever since the government has to borrow from the international donors to meet its foreign obligations.
Published in Dawn, November 14th, 2014