The inflow of remittances from abroad employees increased significantly in March 2023, reaching $2.5 billion, up 27.4% from $1.98 billion in February 2023, according to figures issued by the State Bank of Pakistan (SBP) on Monday.
The inflows were the highest recorded since August 2022, attributed to the Ramadan factor.
“This is a seasonal increase due to the ongoing month of Ramadan, where a lot of funds are remitted on account of Zakat and other charities, which is reflected in the increase in remittances,” said Saad Khan, Head of Research at IGI Securities.
“Because of the increase in remittances, the March current account deficit is likely to be negligible, and there is also a strong possibility of a current account surplus this month,” he added.
Remittances clock in at $2bn in February, down 9.5% on a yearly basis
However, remittances inflows fell 11% year on year, standing at $2.83 billion in the same month the prior year, according to the data.
The cumulative inflow of remittances from July to March of the fiscal year 2022-23 was $20.527 billion, 10.8% lower than the previous fiscal year’s inflow of $23.018 billion, a drop of over $2.5 billion.
“During FY22, the average remittance figure was $2.6 billion, so the latest figures are not particularly exciting,” Khan added.
According to a market expert, the continued currency devaluation and rise in black market premiums have become a huge concern on an annualized basis, as consumers shift their inflows away from legal channels.
“The hawala and hundi problem remains rampant, which is reflected in the accumulated decline,” he noted.
January foreign remittances at 31-month low, clock in at $1.9bn
Overseas Pakistanis in Saudi Arabia sent the most considerable amount in March 2023, totaling $564 million. This was approximately 18% less than the $686 million sent by expatriates the previous month.
Inflows from the United Kingdom increased 5%, from $402 million in March 2022 to $422 million in March 2023.
Jul-Feb FY23: IT, ITeS export remittances up 1.7pc to $1.718bn
Remittances from the United Arab Emirates totaled $407 million in March, a 22% decrease from $521 million in March 2022.
Furthermore, remittances from the European Union climbed by 6% to $299 million in March 2023. Overseas Pakistanis in the United States sent $316 million in March 2023, a 5% increase year on year.
