KARACHI: Pakistan received record remittances in June this year, the central bank said on Monday, with total inflows from Saudi Arabia up by 42% compared to last year, which experts say is largely because of the reopening of remittance channels previously shut down after the coronavirus pandemic began at the beginning of the year.
Strict curfews, lockdowns and travel bans enforced around the world to slow the spread of the COVID-19 outbreak have decimated jobs and slashed remittances from migrants, cutting off a lifeline for millions.
But Pakistan central bank data shows remittances rose by 50.7% during June 2020 to reach a record high of $2,466.2 million compared with $1,636.4 million in June 2019. In fiscal year 2020, the bank said, remittances increased to a historic high of $23.12 billion, 6.4% more than last year.
“Inflow of workers’ remittances registered an increase of 7.8% during March-June 2020 pandemic period compared with the corresponding period of 2019,” the central bank said,
A number of factors have contributed to the significant increase in remittances this June.
“Since many of the countries eased lockdown in June, overseas Pakistanis were able to transfer accumulative funds, which they were unable to send earlier,” the central bank said. ” Further, it is also believed that they sent remittances to support extended families and friends due to COVID-19.”
During June 2020, inflows from Saudi Arabia increased by 42% to $619.4 million as compared to last year’s receipts. The United Arab Emirate UAE was the second largest contributor to Pakistan despite more than 70,000 workers being sent back to Pakistan after the coronavirus crisis broke out. Pakistan received 7.1 percent higher remittances from the UAE, or $431.7 million in June 2020, and $4.66 billion in FY20, against $4.61 billion of FY19.
Analysts say the record inflows of remittances are mainly due to the reopening of remittances channels, not available during the lockdown period.
“Besides opening up of transfer channels, the upcoming festival of Eid is also one of the reasons for the highest ever inflows,” Muhammad Sohail, CEO of Topline Securities, told Arab News.
#WATCH: Economist @MuzzammilAslam3 believes #CoronavirusLockdown in #SaudiArabia and restrictions on #Hajj and #Umrah are the primary reasons behind #Pakistan's record remittances last month. || #Economy
Read special by @Khurshid72: https://t.co/VJXViJtEcJ pic.twitter.com/Xslolryvgc
— Arab News Pakistan (@arabnewspk) July 14, 2020
But experts also warn that remittances could decrease next year, particularly from Gulf countries, as a large number of Pakistani migrant workers based there have been laid off.
“Around 75,000 Pakistanis have been sent back through 275 special flights by June 27 from Abdu Dhabi and Dubai,” Ghulam Dastgir, Pakistan’s Ambassador to the UAE, told Arab News via phone on Monday.
Ghulam Dastgir, Pakistan’s Ambassador to the UAE, talked to Arab News via phone on Monday. Of these, around 40,000 were workers laid off or sent home on leave with or without pay, and between 40,000 to 45,000 are people who have permanently left the UAE, the Pakistani envoy said.
The ambassador said the impact of workers leaving the UAE would be reflected in next year’s remittance inflows, and Pakistani officials were in contact with UAE authorities to minimize the layoffs.