Pakistan receives highest ever remittances in May

Karachi: The overseas Pakistanis sent remittances at a record high of $3.24 billion in May.

According to media report, with reference to the data released by the State Bank of Pakistan (SBP), it was stated that this is a 54 percent increase compared to the remittances received in May last year of $2.10 billion. While the amount received was 15.3 percent more than the previous month, when 2.80 billion dollars were received.

The recovery in remittances is particularly notable because overseas Pakistanis remitted $4 billion less during the fiscal year 2023, compared to a total of $27.9 billion received during the July-May period of the current fiscal year. There is an increase of 8 percent compared to last year.

If this trend continues in June, it could be the second-highest annual remittances in Pakistan's history, with overseas Pakistanis sending the highest remittances of $31.28 billion during fiscal year 2022.

Financial experts attributed the increase in remittances to the arrival of Eid-ul-Adha, traditionally on the occasion of Eid, overseas Pakistanis send more money.

However, other factors such as stable exchange rate, expected foreign investment and improved equity market are also the reasons for the positive trend.

It was also observed that remittances were partially diverted away from the sector due to a sharp fall in property prices, with financial experts saying that if the real estate sector activity picked up, more remittances could come in for investment.

Pakistan relies more on remittances than exports, which have been lower than most remittances in the last five years.

As the current account deficit during the first 10 months of the current fiscal year (July-April) was only $200 million, the inflow of remittances will further support the government. The government expects a deficit of about one billion dollars by the end of this year.

The remittances will also help the government reduce the trade deficit and pay down the debt, the country has to pay about $25 billion in debt in the next fiscal year 2025.

The data shows that the highest amount received from Saudi Arabia during July-May was $6.61 billion, which is 10 percent higher than last year.

During the 11 months of this fiscal year, remittances from the UAE increased by 12.7 percent to $4.88 billion, but remittances from the Gulf Cooperation Council (GCC) countries decreased by 1.6 percent to $2.87 billion during this period.

In addition, Pakistanis living in the United Kingdom sent $4.3 billion after an increase of 8.2 percent during 11 months, while remittances from European Union countries remained almost equal to remittances from the United States.

The remittances from the European Union increased by 12.2 percent to $3.201 billion, while 3.209 billion dollars were received from the United States.