KARACHI: Saudi Arabia and the United Arab Emirates (UAE) contributed 45 percent to the overall remittances sent to Pakistan in August, the Pakistani central bank data showed on Tuesday, as the two brotherly nations continue to play a leading role in supporting the South Asian country’s economy.
Pakistan received a total of $2.7 billion remittances in August, posting a growth of 7.9 percent on a month-on-month (MoM) and by 1.5 percent on an annual basis.
Around 2 million Pakistanis, who live and work in Saudi Arabia, remitted $691.8 million, while Pakistani expats in the UAE remitted $531.4 million. The total inflows from both Gulf countries stood at $1.22 billion, making 44.5 percent of the overall remittances received during the month of August.
“The contribution from Saudi Arabia and UAE which are the major remittance contributors is increasing nowadays as job growth is higher in the Middle East and more people are moving to the avail the opportunities,” Tahir Abbas, research head at the Karachi-based Arif Habib Limited brokerage firm, told Arab News.
Pakistani workers remitted $5.25 billion during the first two months of the current fiscal year starting since July 1, which shows a negative growth of around 3 percent as compared to the same period of last fiscal year.
Financial experts say the country’s annual remittance growth would remain flat around the previous year’s $31.23 billion. They, however, believe inflows from Saudi Arabia and other Middle Eastern countries will continue to grow.
“In Gulf countries, specifically in Saudi Arabia, UAE, Qatar and Bahrain, a lot of jobs are available due to the elevated oil prices for the last one and a half years,” Abbas said.
“The oil-rich Middle Eastern countries have posted fiscal surpluses, therefore they all are going for expansion as their economies are much stronger due to higher oil prices so they need workers and professionals.”
Pakistan desperately needs dollar inflows amid fast depleting foreign exchange reserves that stand at $8.7 billion — barely enough to cover 40 days of imports.
The depleting reserves, despite the transfer of $1.16 billion from the International Monetary Fund (IMF), continue to cause pressure on the national currency.
The Pakistani currency on Tuesday lost 0.91 percent of its value as the US dollar closed at Rs231.92 in the interbank market.
The greenback was trading at Rs238 for selling, compared to Rs236 of the previous day, in the open market, according to the State Bank of Pakistan and the Exchange Companies Association of Pakistan.