ISLAMABAD: The growth in foreign remittances, which soared to $11.4 billion during the July-December period of FY20, is likely to continue for the rest of the year due to a host government measures that may help achieve the target of $24 billion set for the financial year 2020.
“Due to this increasing trend in remittances, the target of $24 billion at the end of FY20 is likely to be achieved as the data of last five years suggests that the workers remitted more in the last six months as compared to the first six months of the fiscal year,” said a statement issued by the Ministry of Finance on Monday.
According to the ministry, seasonal effect was also a leading factor in boosting remittances and it was expected that with the start of Ramadan and the following Eid, the flow of remittances would increase as the workers generally sent more money during the holy events and activities.
Giving a break-up of the remittances received during the Jul-Dec 2019, the statement said that the remittances reached $11.394 billion in 6MFY20 as compared to $11.030 billion in the corresponding period last year, showing a growth of 3.3pc. Overseas Pakistani workers remitted $2.097 billion in December 2019 as compared to $1.819 billion in the same month last year.
On a month-on-month basis, remittances increased by $277.56 million in December 2019, registering a growth of 15.25pc, the highest recorded remittances in a month since May 2019. Similarly, on a year-to-year basis, remittances witnessed a growth of 20pc in December 2019 as compared to 0.14pc in the corresponding period last year.
The share of remittances from Saudi Arabia was at 23pc ($2,618.0 million), UAE 20.6pc ($2,349.3 million), USA 16.6pc ($1,889.8 million), UK 15.4pc ($1,753.0 million), GCC countries 9.6pc ($1,089.20 million), Malaysia 7pc ($798 million), EU 3pc ($ 339.2 million) and other countries 4.8pc.
The finance ministry claimed that increased efforts by the Pakistan Remittance Initiative (PRI) helped attract higher remittances from the Pakistani diaspora through Enhancing Outreach, Reimbursement of T.T. Charges Scheme (Free-send Model) and improvements in payment system infrastructure etc.
“Similarly, visa fee reduction from Saudi Arabia is likely to boost up the inflows while export of manpower had also been increased from 382,000 to 625,000 during January-December 2019.”
As per the statement, the government had improved its diplomatic relations with the Gulf States which had helped restore the confidence of foreign employers in Pakistani workforce. Similarly, reimbursement of T.T. Charges Scheme had also been revised in December 2019. Accordingly, the amount of home remittance transaction equal to and above $100 but less than $200 (or equivalent in other currencies) would be reimbursed at SAR 10/ while the amount of home remittance transaction equal to and above $200 (or equivalent in other currencies) would continue to be reimbursed at SAR 20.
In order to further encourage the promotion of home remittances through formal channels, the government had relaunched the performance-based scheme effective from January 1, 2020 in which Re1 per each incremental USD mobilized over 15pc growth in remittances in calendar year 2020 compared with the levels achieved in calendar year 2019.