Remittances rise 10.7% to $30.3bn in FY24 on legal transfers' strength

In June 2024, inflows surged 44% to $3.16 billion from $2.2 billion registered in the same month a year ago

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Web Desk
A person counts US dollars in a money exchange in Karachi. — AFP/File
A person counts US dollars in a money exchange in Karachi. — AFP/File
  • Inflows in June 2024 drop to $3.16bn compared to May's $3.16bn.
  • Saudi Arabia leads with $808.6m inflows in month under review.
  • Analysts say notable increase in legal funds transfer boost inflows.

Remittances sent home by overseas workers increased by 10.7% to $30.3 billion in the fiscal year 2023-24 (FY24) year-on-year compared to $27.3 billion in the fiscal year 2022-23 (FY23), State Bank of Pakistan (SBP) data showed on Tuesday, mainly owing to a surge in the use of legal channels for fund transfers.

However, on a month-on-month basis, inflows eased 3% to $3.16 billion in June 2024 from $3.24 billion in May 2024, but year-on-year swelled 44% from $2.2 billion registered in the same month a year ago.

This improvement can be attributed to the fact that more overseas Pakistanis sent funds home through official channels like regulated banks and exchange companies due to a stable currency, analysts said. 

This shift is mainly a result of a crackdown on illegal dollar activity, dollar speculators, and money changers.

They said that more use of regulated money transferring channels, a spike in Pakistani immigrants in other countries, and the nation's stable currency and economy were the main causes of the boost in remittances in the last fiscal year.

Source: Arif Habib Limited
Source: Arif Habib Limited

A World Bank report titled "Migration and Development Brief 40" published last month said that in terms of remittances received from overseas workers, Pakistan was among the top five recipients in 2023.

It says remittances flowing into Pakistan are forecast to recover and grow at about 7.0 per cent to reach $28 billion in 2024 and increase at 4.0 per cent to about $30 billion in 2025.

“The top five recipient countries for remittances in 2023 are India with an estimated inflow of $120 billion, followed by Mexico ($66 billion), China ($50 billion), the Philippines ($39 billion), and Pakistan ($27 billion),” according to the report.

Overseas Pakistanis in Saudi Arabia sent home the largest amount in June 2024, with $808.6 million sent during the month. This amount was 1% lower than the previous month but 57% higher than the $516.1 million sent in the same month last year.

Inflows from the United Arab Emirates (UAE) also dropped by 2% from $668.4 million in May to $654.3 million in June. However, compared to the same month last year, remittances increased by 101%, up from $324.8 million.

Remittances from the United Kingdom totaled $487.4 million in June, a 3% increase from $473 million in May 2024.

Meanwhile, remittances from the European Union fell nearly 3% month-on-month to $330 million in June 2024. Overseas Pakistanis in the US sent $322.1 million in June 2024, a 10% decrease from the previous month. 

At a time when the world faces an extremely challenging outlook, remittances are a vital lifeline for households in developing countries, especially the poorest, according to a World Bank document. 

Remittances are primarily money that migrants send home to support their family. 

They alleviate poverty, improve nutritional outcomes, and are associated with increased birth weight and higher enrollment rates for children in disadvantaged households. 

Studies show that remittances help recipient households build resilience, for example, through financing better housing and recovering from losses in the aftermath of disasters, as per the World Bank.