ISLAMABAD: Workers’ remittances, sent by Pakistanis living in the European Union (EU) countries, declined by 7.7% in first quarter of current fiscal year, the State Bank of Pakistan (SBP) reported.
Remittances from the EU countries dropped to $828.8 million in July-September 2022-23 from $898.3 million in the same period of last fiscal year, the SBP data shows. Remittances from the EU countries also decreased by 14.18% in September, and dropped to $259.6 million from $302.5 million in the same month of last year. A decline of 5.53% was also registered in remittances from the EU countries in September when compared to the preceding month of August.
A decline of 6.26% was also witnessed in Pakistan’s overall workers remittances in the first quarter of 2022-23. The country’s total workers remittances stood at $7.684 billion in July-September this year against $8.198 billion in the same period of last year.
Dr Sajid Amin, Deputy Executive Director at Sustainable Development Policy Institute (SDPI) Pakistan, told WealthPK that the main reason for the decline in remittances, especially from the western countries, is the rising inflation.
“Current economic crunch in the UK, the EU and the United States is a matter of concern for remittances inflows from major destinations in the coming months,” he said.
Dr Sajid said the cost of living for Pakistani diaspora in Europe has gone up as the energy prices soared in recent months especially after the Russia Ukraine conflict. “Pakistanis abroad are finding it difficult to send more money back home,” Dr Sajid maintained.
“Remittances are an important component of the economy for Pakistan which has seen its foreign exchange reserves drain due to external debt servicing,” Dr Sajid said, adding that the country needs remittances to keep the economy afloat.
According to the SBP data, workers remittances from Italy declined by 1.43% during the period under review and fell to $227.1 million in Q1 from $230.4 million in the same months of last year. Italy is Pakistan’s largest source of remittances among the EU countries.
Similarly, remittances from France also decreased by 14.34% and were recorded at $112.3 million during the quarter under review against $131.1 million in the corresponding period of last year. Workers’ remittances from Germany, Sweden, Ireland, Belgium, The Netherlands and Denmark also posted negative growth during the same period. Remittances from Spain registered a slight growth of 0.8% and were recorded at $137 million during Q1 against $135.9 million in the corresponding period of last year.
With the volume of $1.889 billion, Saudi Rabia remained Pakistan’s largest source of workers remittances in July-September. However, a decline of 9.83% was also recorded in remittances from the Kingdom.
Pakistan had received $3.361 billion remittances in last fiscal year from the EU countries, 23.2% higher as compared to 2020-21 when numbers were at $2.7286 billion.
Italy remained Pakistan’s largest source of remittances among the EU countries during last fiscal year with $856.7 million inflows, followed by Spain and Germany.
Overall, Saudi Arabia remained Pakistan’s largest source of remittances in 2021-22 with a volume of $7.7433 billion followed by the United Arab Emirates (UAE). Remittances from the UAE were registered at $5.8418 billion.
