Pakistan’s external accounts are set to improve further, as oversees Pakistanis continue to send back home over $1.0 billion every month for the last couple of months. The current higher-than-expected dollar inflows on account of remittances and exports, which the country’s economic managers expect would cross the $24 billion mark this year, are believed to be a major factor in improving the cash-strapped Pakistan’s current accounts that saw a rare surplus of $99 million during July-March FY11 against last year’s deficit of $3.1 billion.
The said period saw the country’s exports reach a record $17.945 billion, over $3.5 billion more than $14.348 billion in the last corresponding period.
Official quarters attribute healthy inflows of the greenback to “Pakistan Remittance Initiative (PRI)”, an initiative launched jointly by the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis to facilitate the flow of remittances through formal channels. “This initiative has started to materialise and remittances through formal channels have shown considerable growth,” the SBP said on Tuesday.
Independent analysts, however, think otherwise. They believe that overseas Pakistanis, gripped by a sense of paranoia in the countries of their work for an uncertain security situation created by the ongoing US-led global war on terror, prefer to transfer their earnings back home instead of holding them back. The State Bank of Pakistan data shows that, during July-April FY11, Pakistanis remitted over $9.046 billion against $7.306 billion in the corresponding period of last year.
This depicts an encouraging increase of 23.81 percent or $1.740 billion when compared with the volume of worker remittances in the same period of FY10. According to the central bank, remittances in the last two months of the current fiscal year, March and April, were $1.030 billion and $1.052 billion, respectively. “Overseas Pakistanis have remitted over $1.0 billion for the second consecutive month. They have remitted an amount of $1,030.42 million and $1,052.90 million in April and March,” the SBP said on Tuesday.
According to the central bank, remittances had already crossed the $9.0 billion mark, which was the target in the Annual Plan for FY11 for the whole fiscal year. It may be pointed out that overseas Pakistani workers had remitted nearly $8.906 billion in the last fiscal year, 2009-2010. The inflow of remittances in the first 10 months of FY11 from the UAE, Saudi Arabia, USA, GCC (Gulf Cooperation Council) countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $2,091.33 million, $2,085.80 million, $1,677.88 million, $1,063.49 million, $990.92 million and $290.77 million, respectively.
The same period last year had seen the inflow of dollars under the head of home remittances amounting to $1,663.17 million, $1,525.90 million, $1,461.80 million, $1,033.00 million, $ 734.59 million and $ 210.22 million, respectively, from the above destinations. The SBP figures showed that remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first 10 months of this fiscal year aggregated to $846.36 million as compared to $676.90 million the country received in the same period last year.
“The monthly average remittances for the July-April FY11 period comes out to $904.66 million in contrast with $730.66 million during the same corresponding period of the last fiscal year,” the state bank said. This registers an increase of 23.81 percent, it added. A monthly breakup reveals that, in April (2011), remittances were up 36.34 percent or $274.65 million when compared with $755.77 million in the last year’s corresponding month.
During April, remittances from Saudi Arabia, UAE, USA, GCC countries, UK and EU countries amounted to $263.80 million, $232.05 million, $186.83 million, $115.37 million, $111.39 million and $35.04 million, respectively, as compared to $183.13 million, $165.98 million, $144.09 million, $100.17 million, $73.62 million and $20.65 million in April 2010. Remittances received last month from Norway, Switzerland, Australia, Canada, Japan and other countries amounted to $85.94 million compared with $68.12 million in the same month last year.
