Overseas Pakistanis remit $12.8bn in first eight months of FY18: SBP

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KARACHI: Overseas workers remitted $12.8 billion in first eight month of the current fiscal year (July-February), which is up by 3.4 per cent, data released by the State Bank of Pakistan (SBP) showed on Friday.

Remittances in February grew 2.3 per cent to $1.45 billion, data showed.

Inflows from the United States increased 17 per cent to $207 million in February while those from the United Kingdom rose 18 per cent to $201 million. Pakistani workers based in the European Union (EU) remitted $48.6 million, up 53.3 per cent from a year ago.

Inflows from the United Arab Emirates increased 3.7 per cent to $332.2 million last month. Pakistani workers based in Qatar, Bahrain, Kuwait and Oman sent home $149.1 million in February, down 11 per cent from a year ago.

Pakistan’s external sector depends heavily on a steady flow of remittances. The recent slowdown in the growth in monthly inflows has contributed to the ongoing deterioration on the external front of the economy. Analysts attribute the slow pace of increase in remittances to dwindling inflows from Saudi Arabia, that dropped almost 14 per cent to $348.3 million last month.

In the first eight months of 2017-18, inflows from the Kingdom have decreased 8.7 per cent to $3.2 billion.

Remittances from Riyadh are shrinking as Pakistani workers adjust amidst structural changes that Crown Prince Mohammad bin Salman is introducing to modernise the Saudi economy and reduce reliance on energy exports.

Saudi Arabia, which has traditionally been the largest source of remittances, hosts one of the largest Pakistani immigrant populations worldwide. However, most of these workers are unskilled and currently face an uncertain future in the wake of the ongoing Saudisation movement, which aims to replace a majority of foreign workers with Saudi nationals.

Recent reports suggest Pakistan’s labour export to Saudi Arabia dropped by half in 2017. According to the SBP, over one-third of Pakistanis who went abroad for work, mainly to Gulf countries, in the last two years were labourers. But the slowdown in construction activities in these countries amidst low oil prices and fiscal retrenchment has reduced demand for low-skilled Pakistani workers.

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