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Pakistani expats send $11.38 billion home in first seven months of fiscal year

Pakistan depends greatly on workers’ remittances from Saudi Arabia and other Middle Eastern countries, particularly in the GCC. (REUTERS)
KARACHI: Pakistanis working overseas have sent $11.383 billion to their homeland in the first 7 months — July to January — of the current fiscal year (FY18), the State Bank of Pakistan said in a statement on Tuesday.
That remittance has grown 3.55 percent compared to the amount remitted during the same period in the preceding fiscal year, and the statement suggested that the total remittance sent home by overseas workers in FY18 could reach $20 billion. The target set for FY18, however, was $20.7 billion.
In January 2018, the inflow of workers’ remittances amounted to $1.639 billion, which is 4.92 percent lower than December 2017, but 10.10 percent higher than January 2017.
“The economic conditions of the Middle East and localization of labor in some countries have largely affected the inflow of workers’ remittances,” Muzzamil Aslam, senior economist and CEO of EFG-Hermes Pakistan, told Arab News.
Pakistan depends greatly on workers’ remittances from Saudi Arabia and other Middle Eastern countries, particularly in the GCC.
According to the bank, remittances sent by workers from Saudi Arabia in FY18 amount to $2.91 billion compared to $3.16 billion in FY17. However, the amount from the UAE has marginally increased from $2.4 billion to $2.5 billion.
The bank’s statement explained that lower remittances from the GCC were “offset by an improvement in remittances from non-GCC corridors, particularly the US and UK.”
Economists believe that the potential value of home remittance to Pakistan’s economy could be as high as $34 billion, but that, currently, the unofficial channels of Hundi and Hawala — using untraceable methods including IOUs and agents — account for almost 50 percent of incoming remittance.
“The government must come up with lucrative incentives to attract remittance through official channels,” Dr. Athar Ahmed, a senior economist, said, adding: “Pakistan may face pressure in the coming days, as its workforce in some countries is being reduced.”
Aslam believes that any bottleneck in remittance could exert serious pressure on the country’s balance of payment situation. Pakistan already faces a current-account deficit of $7.6 billion, which is 4.4 percent of its GDP.

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