KARACHI: Saudi Arabia remained the largest source of workers’ remittances to Pakistan in the seven months of the current fiscal year, data shared by Pakistan’s central bank showed on Monday, with Riyadh contributing $3.8 billion out of the total $15.8 billion received by the South Asian country from July 2023 to January 2024.
Saudi Arabia remains among the top destinations for Pakistani laborers who remit money back to their families. Workers’ remittances are important for Islamabad as it reels from an economic crisis that has seen its reserves plummet to low levels and its currency weaken against the US dollar, forcing it to seek financial assistance from global lenders and friendly countries.
Pakistan received $2.4 billion in remittances during January 2024, 0.6 percent higher compared to December 2023 and 26.2 percent higher compared on a year-on-year basis, the State Bank of Pakistan (SBP) said in a press release. The central bank said Pakistan received a total of $15.8 billion during the first seven months of the current fiscal year, with remittances from Saudi Arabia clocked in at $3.8 billion, from the United Arab Emirates (UAE) at $2.7 billion, while Pakistani workers from other Gulf countries remitted $1.7 billion in the same period.
“Remittance inflows during Jan. 24 were mainly sourced from Saudi Arabia ($587.3 million), United Arab Emirates ($407.6 million), United Kingdom ($362.1 million) and United States of America ($283.4 million),” the SBP said in a press release.
Pakistan received $27.3 billion in total during the last fiscal year, which included $6.5 billion from Saudi Arabia, $4.6 billion from the UAE, $3.2 billion from other Gulf countries, $3.1 billion from the European Union countries, and $3.2 billion from the USA. The South Asian country recorded its highest remittance inflows of $31.3 billion in fiscal year 2022.
Tahir Abbas, head of research at Arif Habib Limited (AHL), said Pakistan’s remittance inflows were increasing due to the government’s recent crackdown against illegal money transfer systems such as hawala and hundi.
“The inflows are improving due to action taken by authorities against illegal channels,” Abbas told Arab News.
Pakistan has set workers’ remittance inflow target for the current year at $28.5 billion.
Abbas believes Pakistan will see a further surge in workers’ remittances as the Muslim festivals of Eid Al Fitr and Eid Al Adha will fall within the current fiscal year.
“The second half of the current fiscal year would be much better due to seasonal impacts, as workers traditionally send more remittances to their families back home,” he explained.
