Remittances by overseas Pakistanis have exceeded the Annual Plan’s estimates for FY11 by $2.2 billion or 24.4 per cent. The remittances have crossed the $11 billion mark in FY11 for first time in the country’s history according to State Bank of Pakistan (SBP). Analysts at SBP considered the trend to be positive saying that a healthy inflow of greenback would help the country bring its ailing economy back on track.
In 2008 economic managers in Pakistan, fearing default, turned towards the International Monetary Fund (IMF) as a last resort. The IMF sanctioned, with tough provisions, a stand-by arrangement loan of $11.3 billion to Pakistan that helped Islamabad avoid default.
Economic observers in the local money market said that the current inflow of dollars due to remittances and exports would also keep the rupee stable in currency market against the dollar.
According to the central bank remittances in FY11 were recorded at $11,200.97 million, showing an impressive growth of 25.77 per cent or $2,295.07 million when compared to $8,905.90 million received during FY10. The government’s target for workers’ remittances in FY11 was nine billion dollars.
Overseas Pakistanis sent home a record amount of $1,104.56 million in June 2011, which is the highest amount remitted in a single month. The remittances sent home by overseas Pakistanis in June 2011 were up by 31.27 per cent or $263.12 million when compared to $841.44 million received in the same month of fiscal year 2009-10. This was the
fourth consecutive month of the last fiscal year when remittances exceeded $1 billion.
The inflow of remittances in July-June, 2011 period from Saudi Arabia, UAE, USA, Gulf Cooperation Council (GCC) countries (including Bahrain, Kuwait, Qatar and Oman), UK and European Union (EU) countries amounted to $2,670.07 million, $2,597.74 million, $2,068.67 million, $1,306.18 million, $1,199.67 million and $354.76 million, respectively, as compared to $1,917.66 million, $2,038.52 million, $1,771.19 million, $1,237.87 million, $876.38 million and $252.22 million respectively in the July‐June, 2010 period. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the last fiscal year (2010‐11) amounted to $1003.81 million as against $811.04 million received in the preceding fiscal year (2009-10).
The monthly average remittances for July 2010 – June 2011 period comes out to $933.41 million as compared with $742.16 million during the preceding fiscal year, registering an increase of 25.77 percent.
Earlier the State Bank of Pakistan, Ministry of Finance and Ministry of Overseas Pakistanis had undertaken a joint initiative called ‘Pakistan Remittance Initiative (PRI)’ with a view to facilitate the flow of remittances in the country through formal channels. This initiative has shown remarkable progress as the remittances through formal channels during fiscal year 2010-11 have beaten all previous records.