Remittances surged by 6pc to $5.2B in July-Oct

The remittances grew by $311 million (or 6.27pc) to $5.275bn in the first fourth months (July to October) of the current fiscal year compared with $4.964bn a year earlier, State Bank told.

The amount ($5.275bn) is 25 per cent higher than the SBP’s foreign exchange reserves and almost equal to the reserves held by commercial banks.

The country’s reserves, particularly of the SBP, have been falling sharply as the inflows have no match with the outflows. The biggest share in outflows is of repayments of debts, followed by profits and dividends being taken out by foreign investments. Disinvestment is also one of the reasons of surging outflows.

During the first quarter (July-September) of this fiscal year the net outflows of profits and dividends were $202m while the inflows of foreign direct investments were just $231m. The serious imbalances in outflows and inflows have resulted into a soaring current account deficit, which rose to minus 1.2bn during this period.

The monthly average inflow of remittances reached $1.318bn from $1.24bn in the same period a year earlier.

The remittances have become the real backbone of the country, especially for its reserves and repayments of debts.

Major contributors to the remittances were Saudi Arabia from where Pakistan received $1.459bn, followed by the United Arab Emirates ($1.060bn), the United States ($850m) and the United Kingdom ($807m).