Remittances to Pakistan up $2B for 10th month in row

KARACHI, Pakistan

The Pakistani central bank said on Monday the country's overseas remittances surpassed $2 billion for the 10th consecutive month.

Remittances from Pakistanis living overseas, mainly in the Gulf states, totaled $2.7 billion in March, a 43% increase over the same month last year, the State Bank of Pakistan said in a statement.

Prime Minister Imran Khan acknowledged the overseas contribution in a tweet, saying that despite the COVID-19 outbreak, international remittances have increased by 36% in the current fiscal year.

His government, which has been under severe criticism over rising inflation and poor economic growth, takes credit for increasing remittances, terming it a positive sign for the otherwise tottering economy.

Economists, however, see travel bans caused by the pandemic as the major reason behind the rise.

A large number of overseas Pakistanis, according to Karachi-based economist Shahid Hasan Siddiqui, used to return to their homeland and bring money with them, but this has not been the case over the past year.

"Due to travel bans, these Pakistanis have been sending money back home through banking channels, showing an increase in the remittances," he told Anadolu Agency.

Another factor, according to Siddiqui, is that the banking system has improved, making it easier for overseas workers to send remittances through banks.

"I don't see this as a blessing because the government is adjusting these remittances to reduce the current account deficit instead of investing it to roll out the economy," he contended.

Huge amounts of remittances sent by expatriates in Saudi Arabia, the UAE, Qatar, Kuwait, and other Gulf states have a significant impact on the country’s economy.

Saudi Arabia, which alone hosts 1.9 million Pakistanis, tops the list of countries with the highest remittances, with over $4.5 billion annually, followed by the UAE with over $3.47 billion, according to the State Bank of Pakistan.