In keeping with the trend over the past many months, workers’ remittances stayed above $2 billion in May 2021, driven higher by the proactive policy measures taken by the government and the State Bank of Pakistan (SBP) to encourage expatriates to use formal money transfer channels.
According to data released by the central bank on Thursday, the remittances sent home by overseas Pakistanis rose 33.5% to $2.5 billion in May on a year-on-year basis.
“Remittances continued their exceptional streak in May 2021, remaining above $2 billion for the record 12th straight month,” it said.
The SBP said that the use of formal channels by overseas Pakistanis to send money back home, sharply lower cross-border travel in the wake of Covid-19, altruistic transfers to Pakistan amid the pandemic and orderly foreign exchange market conditions fuelled the rise in inflows.
Talking to The Express Tribune, Alpha Beta Core CEO Khurram Schehzad said that Pakistan was able to sustain the uptrend in remittances. The rise in remittances for May 2021 was partially due to Eidul Fitr, he said.
“Covid continues to impact the flow of remittances into Pakistan, which have been on the uptrend for the past few months,” he said.
He projected that remittances for full fiscal year 2020-21 would cross $28 billion and remained optimistic that the final figure would be well above the $29 billion mark.
On a month-on-month basis, the workers’ remittances fell 10.4% in May 2021. According to the SBP, the dip was expected as remittances usually slow down after Eidul Fitr.
“As Eid fell in mid-May 2021 with markets closed a week earlier, there was some front-loading of remittances in April 2021,” it said. “However, the seasonal decline in May 2021 was less than half the average decline observed during fiscal years 2016-2019.”
In FY20, the remittances showed an exceptional rise due to the easing of Covid lockdowns in the post-Eid period in Gulf countries, the statement added.
On a cumulative basis, the remittances surged to $26.7 billion during July-May FY21, higher by 29.4% compared to the same period of last year.
“Remittances in the first 11 months of FY21 have already crossed the full FY20 level by $3.6 billion,” the SBP said.