KARACHI: Remittances from overseas Pakistanis grew 7.5 per cent to cross $8 billion in the first five months (July to November) of this fiscal year, the State Bank of Pakistan said on Thursday.
However, the growth was slower compared to 17.5pc during the same period a year earlier, a worrying trend for the government faced with floundering exports.
During November 2015 alone, the inflow of workers’ remittances amounted to $1.591bn, 3.3 per cent higher than October 2015 and 18.4pc higher than November 2014.
Inflows rose to $8.098bn during the period; US and EU show downtrend
The inflows have been rising from the Middle East countries, but have remained stagnant from the Western countries including the European Union, the United States and the UK during the period under review.
A recession in the global market has created serious problem for Pakistan to improve its exports earning while the government has been increasing foreign exchange reserves through borrowing.
The highest growth in the inflows was noted from the United Arab Emirates as remittances from the country increased by 12.3pc to $1.831bn. However, the highest amount came from Saudi Arabia as Pakistanis residing there sent home $2.392bn, an increase of 11pc compared to a year ago.
Increasing remittances from Saudi Arabia and other Arab countries have also helped allay fears emerging out of a massive fall in crude oil prices and deteriorating regional political situation. It has been suggested by independent economists that Pakistan should concentrate more on exporting manpower rather than borrowing from the international market at exorbitant rates.
Remittances from Arab countries rose by $543m year-on-year to $5.183bn during July to November 2015, while the amount from EU, US and UK increased by just $14m to $2.347bn.
In fact, remittances from the United States have dropped 1.5pc this year compared to a growth of 12.5pc a year ago. The growth of remittances from EU countries also fell by 7.7pc.
Banks dealing in remittances fear that the inflows from the US, UK and other Western countries could suffer due to increasing focus on the issue of terrorists funding. They also believe a political turmoil in the Middle East could lead to a stricter remittances regime.