Remittances fall 18.6pc YoY to $1.87bn in May

KARACHI: Remittances from overseas Pakistani workers in May 2020 fell 18.6 percent or $429.2 million compared to $2.3 billion recorded in May 2019, according to data released by the State Bank of Pakistan (SBP) on Monday.

Overseas Pakistani’s remitted a total of $1.87 billion in May 2020, a rise of $82.8 million or 4.6 percent, compared with $1.79 billion worth of remittances received in April 2020.

The remittances recorded in May 2019 were the highest recorded monthly figure of that year, which explains the drastic year-on-year percentage drop. 

In explaining the figures, the central bank said that job losses of overseas workers and closure of international borders because of the Covid-19 pandemic were the main factors affecting remittances flow. 

The SBP also noted that last year, the whole month of Ramadan fell in May 2019 which caused a spike in remittances during the month. 

Workers’ remittances received during the first 11 months of the current fiscal year stood at $20.65 billion, an increase of 2.7 percent or $551.5 million compared to $20.1 billion received during the same period of last year.

When comparing remittances received during May 2020 and that received in April 2020, some countries experienced an increase, while others experienced a decrease. 

According to the data, remittances received from Saudi Arabia and United Arab Emirates stood at $436.2 million and $323.4 million respectively.

However, remittances from the United States of America (USA) and the United Kingdom (UK) stood at $428.3 million and $284.8 million respectively. 

Monthly figures for remittances have generally fluctuated between $1.9 billion and $1.8 billion since the start of 2020. The year 2019 saw much more variation in terms of remittances, with a low of $1.6 billion and a high of $2.3 billion.

This trend of stable remittances in 2020 is subject to change, however, as the Covid-19 pandemic affects the employment of Pakistanis working abroad. 

A fall in remittances, along with a fall in exports, may exert some pressure on net SBP reserves. Reserves have dropped to $10.096 billion during the week ending June 5, 2020, according to the latest SBP data, and there is a concern that reserves may fall to below single digits later this year.