The remittance bonanza continues – for a 10th consecutive month. The money sent home every month by the Pakistani expat community has been in excess of two billion dollars right through the period between June 2020 and March 2021. The total amount remitted from abroad in the first nine months of the ongoing fiscal year is $21.5 billion as compared to $17 billion in the same period during the previous fiscal year – thus showing a mammoth accumulative growth of $4.5 billion or 26.2%. The latest, March 2021 figure – $2.72 billion – is 20% higher month on month and 43% higher year on year.
The monthly average of the amount remitted in the first nine months of this fiscal is $2.38 billion as compared to $1.88 billion in the corresponding period the previous fiscal. This rise of $500 million or so a month in the volume of remittances roughly makes $6 billion a year – a figure that equals the amount received from the IMF under its bailout package for Pakistan. The accumulative annual receipts from the overseas Pakistani community alone outnumber what the country earns under the heads of exports and FDI together.
The remittances from abroad have long been a big support for our country which is awfully desperate for foreign exchange, but the last 10 months have been worth celebrating. No wonder Prime Minister Imran Khan is extremely happy and has once again thanked the overseas Pakistanis in a tweet saying that their “love and commitment” is “unparalleled”. Finance Minister Hammad Azhar has also taken to Twitter to share the news with the countrymen.
While this continuous rise has much to do with Covid-related travel restrictions that have driven increased inflows through legal channels, the SBP must also be credited in the context for its proactive policy steps – like the Roshan Digital Account – that motivated the overseas Pakistanis to use formal channels for funds transfer. Besides, FATF-related pressures may have also contributed to the rise in the volume of remittances, according to experts.
There are, however, concerns that the remittance bonanza may not continue once things get back to pre-Covid normal. While status quo bias may be expected to work in our favour, the government and the central bank must take steps in the shape of motivational offers for the expat community so that they continue to use legal channels for money transfer.
Published in The Express Tribune, April 15th, 2021.