Remittances sent by overseas Pakistanis made history with consistent growth in inflows recorded every month during the financial year 2020-21, which reached the historic level of $29.4 billion. This is the all-time high inflow of remittances received by Pakistan in a single financial year in its history.
The inflows of remittances stood above $2 billion for 13 consecutive months from the last year to this year, which is also a historical record thanks to expatriate Pakistanis whose hard-earned money provided extraordinary support to Pakistan’s economy.
According to the State Bank of Pakistan (SBP), remittances registered a substantial 27 percent growth in FY21 over last year, the fastest rate of expansion since FY03.
1/2 On a cumulative basis, remittances rose to a historic annual high of $29.4 billion in FY21. This has helped improve the country’s external sector position despite the challenging global economic conditions in the past year. pic.twitter.com/BHsiHl5126
— SBP (@StateBank_Pak) July 13, 2021
The growth in inflows of remittances is attributed to various factors, including the increasing use of banking channels by overseas Pakistani due to COVID-19 related travel ban across the world.
Furthermore, the government’s efforts such as Roshan Digital Accounts (RDAs) and incentives to the banks, along with other measures, played a significant role.
Overseas Pakistanis have provided ample support to Pakistan’s economy through remittances. They proved several global and local thinktanks wrong, who forecasted that there would be a steep drop in remittances inflows due to the pandemic-related lockdowns and subsequent layoffs.
However, there were some positive forecasts as well, predicting that the remittances would cross the $28 billion mark.
With the support of overseas workers, Pakistan maintained its current account effectively throughout the financial year as remittances remained an instrumental weight in maintaining the sensitive macroeconomic indicators.
Remittance inflows during FY21 were mainly sourced from Saudi Arabia with a surprising amount of $7.7 billion and $6.1 billion from the United Arab Emirates.
Remittances received from the United Kingdom stood at $4.1 billion and the United States at $2.7 billion.
In June 2021, the remittances inflows stood at $2.7 billion—the second-highest figure recorded in a single month. In April, the remittances surged to $2.8 billion, which is the highest ever number recorded in a single month this year.
The growth in inflows was attributed to the seasonal upsurge ahead of Eid, which usually witnesses an increase in remittances due to fulfillment of religious obligations such as Zakat and sacrificing animals and celebration of religious festivities.