January 13, 2020: The growth in foreign remittances that soared to $11.4 billion during the July-December period of FY 2020 is likely to continue for the rest of the year due to a host government measures that may help achieve the target of $24 billion set for the financial year 2020.
“Due to this increasing trend in remittances, the target of $24 billion at the end of FY2020 is likely to be achieved as the data of last five years suggests that the workers remitted more in the last six months as compared to the first six months of the fiscal year,” said a statement issued by the Ministry of Finance.
The Ministry said that seasonal effect was also a leading factor in boosting remittances and it was expected that with the start of Ramadan and the following Eid, the flow of remittances would increase as the workers generally sent more money during the holy events and activities.
Giving a break-up of the remittances received during the Jul-Dec 2019, the statement said that the remittances reached $11.394 billion as compared to $11.030 billion in the corresponding period last year, showing a growth of 3.3 percent. Overseas Pakistani workers remitted $2.097 billion in December 2019 as compared to $1.819 billion during November 2019.
On a month-to-month basis, the remittances increased by $277.56 million in December, with growth of 15.25percent, the highest recorded remittances in a month since May 2019. Similarly, on a year-to-year basis, remittances witnessed a growth of 20 percent in December 2019 as compared to 0.14 percent in the corresponding period last year. The share of remittances from Saudi Arabia was at 23.0 percent ($2618.0 million), U.A.E 20.6 percent ($2349.3mn), USA 16.6 percent ($1889.8 million), U.K 15.4 ($1753.0 million), other GCC countries 9.6 percent ($1089.20 million), Malaysia 7.0 percent ($798.0 million), EU 3.0 percent ($339.2 million) and other countries 4.8 percent.
The statement by the Ministry of Finance further said that increased efforts by the Pakistan Remittance Initiative (PRI) helped to attract higher remittances from the Pakistani diaspora through Enhancing outreach, Reimbursement of T.T. Charges Scheme (Free-send Model) and Improvements in Payment System Infrastructure, etc. Similarly, visa fee reduction from the Kingdom of Saudi Arabia is likely to boost up the inflows while the export of manpower had also been increased from 382,000 to 625,000 during January-December 2019, with an increase of 243,000 as compared to the corresponding period last years.
The statement further said that the government had improved its diplomatic relations with the Gulf States which had helped restore the confidence of foreign employers in the Pakistani workforce. Similarly, reimbursement of T.T. Charges Scheme had also been revised in December 2019. Accordingly, the amount of home remittance transaction equal to and above USD 100/- but less than USD 200/- (or equivalent in other currencies) would be reimbursed at SAR 10/ while the amount of home remittance transaction equal to and above USD 200/- (or equivalent in other currencies) would continue to be reimbursed at SAR 20/-.
In order to further encourage the promotion of home remittances through formal channels, the Government of Pakistan had re-launched the performance-based scheme effective from January 01, 2020, in which, Rs. 1 per each incremental USD mobilized over 15% growth in remittances in the calendar year 2020 compared with the levels achieved in the calendar year 2019.