Pakistan is on track to achieve a record $32 billion in remittance inflows in the current fiscal 2021-22 as its over nine million overseas workers remitted a record $8.04 billion during the first quarter ended on September 30.

The latest data released by the State Bank of Pakistan (SBP), the central bank, showed that non-resident Pakistanis sent 12.5 per cent more money back home during the July-September quarter compared to the same period last year. It is the highest ever quarterly remittance received by the country in its 75 years of history.

"If the first-quarter trend persists, Pakistan remittances could hit the figure of $32 billion during the current financial year. This contributes significantly to countering external pressure on balance of payment," according to the Trust Securities and Brokerage Limited.

UAE, Saudi Arabia lead

Overseas Pakistanis residing in the UAE and Saudi Arabia contributed a major share in total remittances as they sent $1.55 billion and $2.03 billion, respectively. The remittance outflows from the UAE to Pakistan climbed nine per cent year-on-year basis, while Saudi Arabia registered a slight decline of three per cent during the quarter.

Remittances from the US and UK soared 32 per cent ($833 million) and 13 per cent ($1.12 billion), respectively. First-quarter inflows from the European Union surged 48 per cent to $889 million from $601 million in the same quarter last year.

"Proactive policy measures by the government and SBP to incentivise the use of formal channels, curtailed crossborder travel in the face of Covid19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions have positively contributed towards the sustained improvement in remittance inflows since last year," the SBP said.

Record-breaking rally

Pakistan economy has received much-needed support and relief through a consistent upward remittances trend since June 2020.

Remittances to Pakistan remained above $2 billion since June 2020. The central bank said this is also the seventh consecutive month that inflows were around $2.7 billion on average.

Pakistan received record $29.4 billion remittances during the financial year 2020-21 compared to $23 billion it received during the financial year 2019-20.

The government expects $31 billion in remittances for the present fiscal year of 2021-22.

Samiullah Tariq, head of research at Pakistan Kuwait Investment, said the country is likely to exceed the $31 billion remittances target this year due to strong first-quarter data.

"Yes, I believe Pakistan should achieve $31 billion remittances target in 2021-22," Tariq told Khaleej Times on Saturday.

He attributed the growth in remittances to the government and the central bank's measures and growing awareness about terrorism financing and anti-money laundering. The majority of overseas workers now prefer to send money through official channels.

"Digital means to remit money from abroad have also played a major role in boosting remittances," Tariq said.

Records forex inflows

Another analyst said the country is expected to receive record $70 billion foreign exchange inflows this year that will ease pressure on balance of payment and the rupee, which depreciated more than 8.5 per cent since June 2021.

Elaborating, he said remittance inflows will lead with $32 billion and followed by export of goods ($30 billion), services export ($6 billion) and Roshan Digital Account ($2 billion).

On Friday, the central bank said cumulative inflow under the Roshan Digital Account (RDA) reached $2.411 billion since its inception in September 2020.

"Out of the $2.411 billion deposited in RDAs, about $1,660 million, or over 68 per cent, have been invested in Naya Pakistan Certificates," the SBP said.

The central bank data shows that 248,723 accounts have been opened from 175 countries during the 13-month period.

"The number of accounts opened increased by 12.6 per cent on monthly basis in September while the value of inflows surged 21 per cent to $297 million," according to the SBP.

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