Pakistan receives $2.6b remittances from GCC

DUBAI — Overseas Pakistanis residing in the GCC states expressed confidence on the sound economic policies of government by contributing a major share in record $5.49 billion remittances in financial year concluded June 30.

By Muzaffar Rizvi

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Published: Fri 20 Jul 2007, 9:55 AM

Last updated: Sat 4 Apr 2015, 10:21 PM

Workers residing in the GCC states contributed 48 per cent in remittances and sent $2.64 billion or 28.31 per cent more foreign exchange through official channels back to their homes in financial year 2006-07.

Pakistanis in Saudi Arabia and UAE remained on top of the list by sending $1.02 billion and $866.49 million remittances respectively during July-June 2007 period.

However, Pak expatriates in other GCC countries notably Kuwait, Qatar, Oman and Bahrain, sent $757.33 million remittances in the last fiscal year as against $596.46 million in 2005-6, reflecting growth of 27 per cent.

According to the latest available statistics from the State Bank of Pakistan (SBP), the central bank, the country received 28.31 per cent more remittances from the GCC states in financial year 2006-07. Remittances from Saudi Arabia and the UAE recorded 36.39 per cent and 21 per cent respectively year-on-year growth.

Pakistanis in Dubai ($635.6 million), Abu Dhabi ($200.4 million) and Sharjah ($28.86 million) played key role in boosting remittances from the UAE to Pakistan. However, expatriates in Kuwait ($288.71 million), Qatar ($170.65), Oman ($161.69) and Bahrain ($136.28 million) also contributed a significant share in remittances.

The inflow of remittances from the GCC states exceeded the $2.5 billion mark for the first time after September 11 attacks as the banks and other financial institutions offer competitive rates and better services to the workers residing in the Middle East region.

Single largest contributor: The United States ($1.45 billion) and the United Kingdom ($430 million) were the other major sources of the country's foreign exchange earnings after exports and foreign direct investment, which crossed $6 billion mark for the first time in 2007.

Remittance inflows from United States to Pakistan recorded 17.47 per cent year-on-year growth in July-June 2007 period and placed the US as single largest contributor to remittances.

Moreover, remittances from the European Union countries stood at $149 million as against $119.62 million in corresponding period of last fiscal year. Share of other countries including Norway, Switzerland, Australia, Canada and Japan amounted to $804 million in 2006-07.

Highest monthly inflow: Workers' remittances recorded the highest-ever increase in March this year as the inflows surged to $520.24 million as against $423.56 million in March 2006, reflecting an increase of 22.83 per cent. However, in terms of percentage change, remittance inflows surged 45.27 per cent in November 2006 as against $448.61 million in corresponding period of previous year.

In June 2007, remittances recorded only nine per cent increase and amounted to $505.55 million. The monthly average remittances for the period July 2006–June 2007 comes out to $457.80 million as compared to $383.34 million during the same corresponding period of the last fiscal year, registering an increase of 19.42 per cent.

Record remittances: Talking to Khaleej Times, a senior official of SBP said Pakistan received the highest-ever $5.49 billion remittances during the last fiscal year.

“Never before in the history of Pakistan, the country received more than $4.6 billion as workers’ remittances,” he said.

He said $5.49 billion record remittance inflows also include $2.24 million received through en-cashment and profit earned on foreign exchange bearer certificates and foreign currency bearer certificates.

He said the federal government had projected $4.5 billion remittances target for financial year 2006-07 but strong inflows from GCC states and US played key role in exceeding the target by $1 billion.

He said in changing global scenario, expatriates across the world prefer to transfer their money through official channels, however he acknowledged that there is still room to further improve the banking services being offered by the Pakistani banks. The annual inflow of remittances reached $4 billion during the last two financial years as the overall improvement on economic front has revived the trust of the overseas Pakistanis.

The country received $4.6 billion in foreign exchange remittances during financial year 2005-06.

In 1998-99, the remittances suffered a serious blow when the foreign currency accounts were frozen which reduced the annual transfer of remittances to less than one billion dollars a year. However, the inflow of remittances is gradually improving in recent years due to overall improvement in the economy of the country.

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