By Shahid Iqbal
Published in Dawn on September 11, 2021
KARACHI: The country received $5.364 billion during the first two months of the fiscal year 2021-22 (2MFY22), showing growth of 10.4 per cent compared to the same period in FY21 when inflows were $4.859bn, data shared by the State Bank of Pakistan (SBP) showed on Friday.
“In terms of growth, remittances increased by 26.8pc year-on-year in August which is a decade-high growth rate for that month,” said the SBP. The central bank further said that on a month-on-month basis, inflows were marginally lower than in July, reflecting the usual post-Eid slowdown.
The SBP data showed that remittances remained intact with $2.657 billion during August FY22.
“This is the sixth consecutive month when inflows recorded around $2.7bn on average and 15th consecutive month when they have been above $2bn,” the central bank said.
Pakistan depends largely on remittances for its foreign exchange, with the inflows crossing total export proceeds with wide margin. Overseas Pakistanis remitted record $29.4bn during FY21, helping the country meet the widening trade and current account deficits.
The government believes that it will have to face current account deficit in the range of 2 to 3pc of GDP in FY22 against 0.6pc of GDP in FY21. This indicates that remittances would be more important in FY22 to keep the external account on positive side. The government would need up to $20bn for repayment this fiscal year while the trade gap could be even larger than that in FY21.
Inflows in August remain highest in a decade
Highest remittances amount came from the Kingdom of Saudi Arabia (KSA) despite a 5.6pc decline during 2MFY22 compared to 36pc growth in the same period of FY21. Inflows from KSA were $1.335bn during 2MFY22 compared to $1.414bn in the same period of FY21.
However, inflows in terms of percentage were highest from the European Union (EU) countries which jumped by 50pc. Inflows from the United States of America (USA) were also significant with an increase of 30.6pc.
Remittances from EU countries rose to $590m compared to $394m; a growth of 49.7pc in 2MFY22 compared to 29.1pc growth noted in the same period of last year.
Inflows from USA during the two months were $591m against $452m of previous fiscal year; an increase of 30.6pc compared to a growth of 66.8pc in the same period of last year.
Inflows from the United Kingdom were $745.7m in 2MFY22 compared to $696m of previous year – an increase of 7.1pc. During 2MFY21, there was 75pc growth.
The inflows from United Arab Emirates during the two months of FY22 were $1043m against $947m in the same period of last year – a growth of 10pc compared to 5.5pc growth in the same months in FY21.
Inflow from other than Gulf Cooperation Council countries were $583m compared to $498m of last year – a growth of 11.5pc.