$2.7 Billion Remittances Depict 2.1% Decline In July 2021

ISLAMABAD: Expatriate Pakistanis sent home remittances worth $2.71 billion in July, the first month of the ongoing financial year. In comparison with July 2020, inflows of workers remittances dropped by 2.1 percent in July 2021.

According to the State Bank of Pakistan (SBP), inflows of $2.71 billion were the second-highest ever level of remittances reported in the month of July. In terms of growth, remittances increased 0.7% over the previous month ($2.68 billion in June 2021), and showed a decline by 2.1% over the same month last year ($2.76 billion in July 2020). This marginal year on year decline was largely on account of Eid-ul-Azha, which resulted in fewer working days this July compared to last year, said the SBP.

Remittance inflows during July 2021 were mainly sourced from Saudi Arabia ($641 million), United Arab Emirates ($531 million), United Kingdom ($393 million) and the United States ($312 million).

The central bank was of the view that proactive policy measures by the government and SBP to incentivise the use of formal channels, curtailed cross-border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions have positively contributed towards the sustained improvement in remittance inflows since last year.

Remittances play an important part in Pakistan’s economy that continues to battle widening trade and current account deficits. The country’s trade deficit widened by 85.53% to $3.104 billion in July 2021 as compared to $1.673 billion in the corresponding month of 2020, said the Pakistan Bureau of Statistics (PBS).

According to trade data, the import bill in July this year went up 47.90% to $5.434 billion against $3.674 billion over the corresponding month last year. Meanwhile, the country’s exports witnessed an increase of 16.44% and remained $2.33 billion in July 2021 compared to $2.001 billion in July 2020.