The Ministry of Finance said on Monday that a host of new measures being taken by the government are likely to help achieve the foreign remittances target of $24 billion set for the current fiscal year, ending June 2020.
The growth in foreign remittances soared to $11.4 billion during the first half of fiscal year 2019-20, a statement issued by the ministry said.
“Due to this increasing trend in remittances, the target of $24.0 billion at the end of FY2020 is likely to be achieved as the data of last five years suggests that the workers remitted more in the last six months as compared to the first six months of the fiscal year,” the handout explained.
The finance ministry said that the seasonal effect was also a leading factor in boosting remittances and it is expected that with the start of Ramazan followed by Eidul Fitr, the flow of remittances will increase as the workers generally send more money during holy festivals and events.
Providing a break-up of inflows during the July-December 2019 period, the statement said that the remittances reached $11.394 billion as compared to $11.030 billion in the corresponding period last year, showing a growth of 3.3 per cent. Overseas Pakistani workers remitted $2.097 billion in Dec 2019 as compared to $1.819 billion during November 2019.
On a month-to-month basis, the remittances increased by $277.56 million in December, with a growth of 15.25pc, the highest recorded remittances in a month since May 2019. Similarly, on a year-to-year basis, remittances witnessed a growth of 20pc in Dec 2019 as compared to 0.14pc in the corresponding period last year.
The share of remittances from Saudi Arabia was 23.0pc ($2,618.0 million), United Arab Emirates 20.6pc ($2,349.3m), United States 16.6pc ($1,889.8m), United Kingdom 15.4pc ($1,753.0m), other GCC countries 9.6pc ($1,089.20m), Malaysia 7.0pc ($798.0m), European Union 3.0pc ($339.2m) and other countries 4.8pc.
The statement by the finance ministry further said that increased efforts by the Pakistan Remittance Initiative (PRI) helped to attract higher remittances from the Pakistani diaspora through enhancing outreach, reimbursement of T.T. Charges Scheme (free-send model) and improvements in payment system infrastructure, etc.
Similarly, visa fee reduction by Saudi Arabia is likely to boost the inflows while export of manpower also increased from 382,000 to 625,000 during January-December 2019 — an increase of 243,000 as compared to the corresponding period last year.
According to the press release, the government has improved its diplomatic relations with the Gulf states which has helped restore the confidence of foreign employers in the Pakistani workforce. Similarly, the reimbursement of T.T. Charges Scheme was also revised in Dec 2019. Accordingly, the amount of home remittance transaction equal to and above $100 but less than $200 (or equivalent in other currencies) would be reimbursed at 10 Saudi Riyal while the amount of home remittance transaction equal to and above $200 or equivalent in other currencies would continue to be reimbursed at 20 Saudi Riyal.
In order to further encourage promotion of home remittances through formal channels, the government relaunched the performance-based scheme effective from January 1, 2020, in which Re1 per each incremental US dollar mobilised over 15pc growth in remittances in the calendar year 2020 compared with the levels achieved in the year 2019, the statement concluded.