ISLAMABAD: Remittances from Pakistani workers employed abroad exceeded $2.0 billion for the eighth straight month in January at $2.3 billion, up 19% from a year earlier, the country's central bank said on Monday, with the highest inflows from Saudi Arabia and the United Arab Emirates.
In a tweet on Monday, Prime Minister Imran Khan said this was a “record” for Pakistan, thanking the diaspora.
The South Asian nation of 220 million relies heavily on remittances to boost the country’s depleted foreign exchange reserves and mitigate a recurrent balance of payments crisis.
The State Bank said Pakistan had received $16.5 billion in total in remittances during July to January of this fiscal year, a 24 percent increase compared to the same period last year.
The bank said the largest remittances during Jul-Jan FY21 came from Saudi Arabia ($4.5 billion), the United Arab Emirates ($3.4 billion), the United Kingdom ($2.2 billion) and the United States ($1.4 billion).
Official statistics show that around four million Pakistanis live and work in Saudi Arabia and the UAE.
The sustained increase in remittances largely reflects the growing use of banking channels, the central bank said in a statement, saying Pakistan was making continued efforts to attract inflows through official channels.
Limited cross-border travel due to a second wave of coronavirus pandemic, and a flexible exchange rate regime also boosted remittances, it added.
Travel restrictions and introduction of digital apps for transferring money are the main reasons behind higher remittances among others, Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Company, told Reuters.
Remittances to Pakistan increased from over five percent of GDP in 2009 to almost eight percent in 2019, according to the World Bank. Their contribution to GDP could be well above nine percent of GDP if they cross the $28 billion mark by the end of this fiscal year.
Experts said the boost in remittances was not only helping stabilize the balance of payments crisis and the currency parity and exchange rate, but also contributing significantly to the country’s economic revival.
“The increase in remittances ultimately helps boost local investment in different sectors especially in real estate, creates job opportunities and extends livelihood support to tens of thousands of families,” Tariq told Arab News.