According to figures released on Tuesday by the State Bank of Pakistan (SBP), remittances sent home by foreign workers totaled $30.3 billion in the fiscal year 2023–24 (FY24), an increase of 10.7% year over year from $27.3 billion in the fiscal year 2022–23 (FY23). The surge in money transfers via authorized and legitimate methods is the reason for this increase.
Though inflows decreased 3% month over month to $3.16 billion in June 2024 from $3.24 billion in May 2024, they increased 44% year over year to $2.2 billion recorded in the same month the previous year.
Because of a stable currency, more Pakistanis living abroad remitted money home via regulated banks and foreign exchange firms, which is why there has been an improvement, according to analysts.
The primary cause of this change is the crackdown on money changers, dollar speculators, and illicit dollar transactions.
According to them, the primary reasons for the increase in remittances in the most recent fiscal year were the country’s stable currency and economy, an increase in Pakistani immigrants abroad, and increased usage of regulated money transfer channels.
According to the “Migration and Development Brief 40” report released by the World Bank last month, Pakistan was among the top five countries receiving remittances from foreign workers in 2023.
Remittances into Pakistan are expected to rebound and expand at a rate of roughly 7.0% in 2024 to reach $28 billion, and at a rate of 4.0% in 2025 to reach almost $30 billion.
According to the report, India is expected to receive $120 billion in remittances in 2023, followed by Mexico ($66 billion), China ($50 billion), the Philippines ($39 billion), and Pakistan ($27 billion).
June 2024 saw the highest sum remitted home by Pakistanis living abroad in Saudi Arabia ($808,6 million). This amount was 57% more than the $516.1 million sent in the same month last year, although it was 1% less than the preceding month.
The United Arab Emirates (UAE) had a 2% decline in inflows as well, falling from $668.4 million in May to $654.3 million in June. Remittances, which were $324.8 million in the same month last year, rose by 101%.
In June 2024, remittances from the UK amounted to $487.4 million, a 3% rise from $473 million in May.
In June 2024, remittances from the European Union decreased by almost 3% on a monthly basis, amounting to $330 million. In June 2024, overseas Pakistanis living in the US sent $322.1 million, a 10% drop from the previous month.
Remittances are an essential lifeline for households in developing nations, especially the poorest, at a time when the global outlook is extremely bleak (World Bank paper).
The main purpose of remittances is for migrants to send money home to support their families.
They reduce poverty, enhance nutritional outcomes, and are linked to greater birth weights and higher rates of enrollment for kids from low-income families.
According to research, remittances assist recipient households in developing resilience by, among other things, paying for improved housing and helping them recover from losses sustained during catastrophes.
