KARACHI: Despite fear of low inflows from overseas Pakistanis due to layoffs and salary cuts in the wake of the coronavirus, remittances witnessed six per cent growth during the third quarter of this fiscal year.

Pakistan received $16.991 billion in remittances during 9MFY20, as against $16bn in the same period last year, reported the State Bank of Pakistan on Friday.

In March too, the inflows jumped 9.28pc year-on-year to $1.894bn as against $1.734bn in same month of 2019 while rising by 3.78pc over $1.825bn in the outgoing February.

Data show that Saudi Arabia yet again was the single-most important destination with remittances from the Kingdom clocking in at $3.925bn in 9MFY20, up 4.7pc, from $3.747bn in the same period last year.

Inflows from the United Arab Emirates stood higher by 4pc at $3.552bn compared to $3.412bn in 9MFY19.

Reports appearing in the media suggest that thousands of Pakistanis have lost jobs in the Gulf while many are facing salary cuts.

A source in Dubai aviation industry said that with tourism badly hit due to the closure of airlines and record low oil prices, thousands of Pakistanis have lost jobs in the Middle East and are waiting to return with the resumption of air traveling. However, no official data is available to justify the number of layoffs in the UAE or other Arab states.

Financial experts see the impact of job cuts in the Middle East would be reflected by the end of this fiscal year. The government has yet not issued any information on the matter.

Remittances from other Gulf Cooperation Council countries also increased 5.4pc to $1.626bn, from $1.542bn. However, the latest figure still stands below 9MFY18 level of $1.648bn.

The United States came in as the third largest source, posting inflows of $2.88bn during July-March, jumping 17.4pc compared to $2.446bn.

According to media reports, more than 16 million people in the US have filed for unemployment claims over the last three weeks, which could pose trouble for inflows coming from the US in the coming months.

Similarly, remittances from the UK edged up 3pc to $2.554bn during the nine months, up from $2.476bn in similar period of 2018-19.

Meanwhile, inflows from Malaysia also inched up 2pc to $1.161bn during July-March FY20, as against $1.139bn in the same period last year.

Another healthy trend boasting an increase of 8.44pc was recorded from the European Union countries that took remittances from the bloc to $474.68m, from $437.74m.

With export proceeds declining as per the last released data, remittances have become more important for the country and any trend in inflows will determine the now worsening external account situation that has lately seen continuous depletion of SBP reserves.

Published in Dawn, April 11th, 2020