KARACHI, Feb 18: Overseas workers’ remittances have increased by 7.8 per cent in first seven months of the current fiscal year which might even cross the government’s target of $4 billion.

The inflows of remittances were the real comfort for the government as the widening trade deficit, which might reach $10 billion by the end of June 2006, is putting enormous pressure on balance of payments position of the country.

The remittances figures issued by the SBP on Saturday showed that the seven month total reached $2.446 billion as against $2.267 billion during the corresponding period of last year.

The higher inflows registered a growth of 7.89 per cent over the seven months of last year. Pakistani workers remitted $391 million during January as against $321 million in January 2005, showing an increase of 21.76 per cent.

The higher inflows of workers’ remittances would contribute up to $4.2 billion to the forex account of the country. The forex reserves, mainly maintained by the SBP, have been facing a tough challenge to keep the total at a ‘satisfactory level’.

“The higher remittances show the confidence of the overseas Pakistanis which was shattered by Nawaz Sharif’s government in 1998, when foreign currency accounts were seized,” said a currency dealer.

The pressure of higher oil prices and overall rise in imports has put enormous pressure on Pakistan’s external account and current account deficit which is likely to touch $6 billion by the end of the current fiscal.

“The remittances are the backbone of the country’s balance sheet, but the export of skilled and non-skilled workers has been adversely affected during the last five years, which should be a prime concern for the government,” suggested an analyst.

The State Bank said that inflow of remittances from almost all countries increased in January as compared to the same month last year. Workers’ remittances were highest from the United States during the seven months which stood at $695 million.