Pakistan to receive record $ 3b remittances from GCC

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Pakistani workers in the UAE remitted 33 per cent more as the amount is estimated at $ 793.62 million in July-March 2008 period as against $ 595.9 million in the same period of 2006-07. In this regard, Dubai contributed significant share as the amount remitted from the emirate stood at $ 552.45 million in first nine months of present fiscal year. Workers in Abu Dhabi and Sharjah also remitted $ 218 million and $ 21.5 million respectively.

$ 6 billion mark: Meanwhile, banking officials in Pakistan told this correspondent that remittances are likely to cross $ 6 billion mark for the first time on strong inflows from the GCC region.

“GCC contributes about 50 per cent in total remittances and this year inflows from the region are likely to cross $ 3 billion by June,” they said. Last year, remittances from GCC states exceeded $ 2.5 billion mark.

“The significant increase in remittances from Gulf region is due to booming regional economies owing to bullish oil market and robust growth in construction and real estate sectors,” they said.

Saudi Arabia ($ 881.95 million) and UAE ($ 793.62 million) remained on top by keeping strong inflows to Pakistan, while other GCC states – Kuwait ($ 272.93 million), Qatar ($ 167.15 million), Oman ($ 159.81 million) and Bahrain ($ 104.38 million) – also contributed significantly during first nine months of present financial year.

Record remittances: Pakistan received the highest-ever $ 5.49 billion remittances during fiscal year 2006-07 and the present trend indicates that inflows from top three regions – GCC, US and European Union – will continue in last quarter.

State Bank of Pakistan (SBP), the central bank, received $ 4.72 billion remittances in July-March 2008 period, showing an increase of $ 791.6 million or 20.1 per cent over the same period of previous fiscal year. It also includes $ 2.15 million received through encashment and profit earned on Foreign Exchange Bearer Certificates and Foreign Currency Bearer Certificates.

Single largest contributor: Latest statistics from SBP revealed that the United States is the single largest contributor in remittances as overseas Pakistanis in US sent $ 1.32 billion in first nine months of 2007-08. Remittances from European Union amounted to $ 465.98 million in which United Kingdom ($ 334.85 million) contributed the major share. Moreover inflows from Norway, Switzerland, Australia, Canada, Japan and other countries also recorded 5.76 per cent increase and amounted to $ 568.06 million in July-March 2008.

Highest monthly inflows: Workers’ remittances recorded highest ever increase in March this year as the inflows surged to $ 602.21 million as against $ 520.24 million in March 2007, reflecting an increase of 15.76 per cent. However, in terms of percentage change, remittance inflows surged 42.35 per cent in January ($ 557.07 million) this year. Remittances registered only 0.85 per cent growth in December 2007 when the country received $ 479.26 million as against $ 475.21 million in December 2006.

Talking to Khaleej Times, a senior official at a local bank said remittances remained on higher side in previous two fiscal years and inflows are likely to hit record $ 6 billion mark by June 30 this year.

“Strong growth in remittances will not only help bridge widening gap between imports and exports but it would also support weakening rupee,” they said.

Pak rupee lost five per cent against the US dollar in the past 12 months due to dwindling exports and rising imports chiefly because of high oil and food prices in the international market.

“Foreign direct investment also slowed due to political upheaval in past one year and record remittances will definitely ease pressure on balance of payments and foreign exchange reserves,” he added.

The inflow of higher remittances despite unstable economic situation would be a cool breeze for the new government, which has no other option but take harsh measures to correct the economic imbalances.

“The most worrisome issue for the government is the rising trade deficit which even surpassed total exports of the country in the first nine months of the current fiscal. The higher foreign exchange inflows would support the government to meet some of its huge deficits,” he concluded.

 

 

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