Remittances from Overseas Pakistanis - Updates

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FDI turns negative with $17m outflow in December​

Shahid Iqbal
January 19, 2023

KARACHI: The country saw a net outflow of $17 million in foreign direct investment (FDI) in December, official data showed on Wednesday, with investment coming into the country plunging 59 per cent in the second half of 2022.

December’s overall outflow mainly came on the back of a $230.1m outflow to Australia, $88.4m to Norway, $33.6m to the United States, and $24m to the UK.

It was in stark contrast to an inflow of $229.8m in December 2021, according to the State Bank of Pakistan (SBP). It was the first time the monthly net FDI was in the negative since March when the outflow was $30m.

In July-December, net FDI dropped 59pc to $461m, as inflows shrank to $932.5m while outflows jumped to $471.6m. FDI was $1.115 billion in the same half a year ago, comprising $1.43bn inflows and $319m inflows.

Net inflows more than halve to $461m in July-Dec

The net outflow of FDI reflects a grim picture of an economy already crushed by growing political and economic instability. The coalition government that came to power in April has been struggling to resolve crises, which have been only growing in both number and intensity.

Independent economic experts say the government must find a quick solution before the economy hits rock bottom.

The FDI has been on the decline since August. Domestic investments have also shrunk during the ongoing fiscal year, which is another reason for poor FDI since foreign investors keenly watch domestic growth in investments.

The SBP data shows that FDI amounted to $78.5m in July, increased to $116.1m in August before taking a dive and fell to $94.4m in September, $91.5m in October, and $82.6m in November.

Besides FDI, foreign currency inflows sent by overseas Pakistanis through the Roshan Digital Account (RDA) have also dropped, amounting to $140m in December, the lowest since December 2020.

“Maybe foreign investors are also waiting for a green signal from the IMF. The country must improve its image regarding the foreign exchange reserves, which have dropped to a near nine-year low,” a senior banker said.

Published in Dawn, January 19th, 2023

 

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Remittances decline 13.1pc YoY to $1.9bn in January​

On a month-on-month basis, remittances decreased by 9.8pc.

Remittances declined for the fifth consecutive month in January, clocking in at $1.9 billion, data shared by the State Bank of Pakistan (SBP) showed on Monday.

This equates to a slump of 13.1 per cent compared to last January’s $2.2bn. On a month-on-month basis, remittances decreased by 9.8pc. In December, remittances amounted to $2.1bn.

The highest inflows were received from Saudi Arabia ($407.6 million), followed by the United Kingdom ($330.4m), the United Arab Emirates ($269.2m) and the United States ($213.9m).

Remittances from other Gulf countries — Bahrain, Kuwait, Qatar and Oman — amounted to $243.6m while $239.6m was received from European states.

The decline in remittances over the last few months has been largely attributed by experts to the artificially low dollar rate in the interbank market, which resulted in the emergence of a very strong black market that started attracting remittances.

After pressure from the International Monetary Fund, the government removed an unofficial cap on the PKR-USD exchange rate on Jan 26 in what experts termed a “much-needed adjustment”.

 

[ghazi52]

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Remittances clock in at $2bn in February, down 9.5% on a yearly basis​

• Inflow, however, recovers marginally on month-on-month basis

BR
March 10, 2023

The inflow of overseas workers’ remittances maintained a subdued trend when compared on a yearly basis, clocking in at $2 billion in February 2023, a drop of 9.5%.

According to data released by the State Bank of Pakistan (SBP) on Friday, the inflow of remittances stood at $2.2 billion in the same month of the previous year.

However, on a month-on-month basis, remittances increased 4.9% as they amounted to $1.9 billion in January 2023.

On a cumulative basis, the inflow of remittances during the July to February period of the fiscal year 2022-23 stood at $17.99 billion, 10.8% lower than $20.18 billion in the same period of the previous fiscal year.

A significant decline in remittance was mostly observed in inflows coming from GCC countries.

Remittances from the United Arab Emirates (UAE) amounted to $324 million during the month, a decline of 16% YoY compared to $386 million in February 2022. On a month-on-month basis, the amount was 20% higher, compared to $269.2 million in January 2023.

Overseas Pakistanis in Saudi Arabia remitted the single largest amount in February as they sent $455 million during the month. However, the amount was nearly 19% lower than the $558 million sent by expatriates in the same month of the previous year.

Inflows from the United Kingdom also dipped 1% as they decreased from $320 million in February 2022 to $317 million in February 2023.

Moreover, remittances from the European Union registered a marginal increase of 3% clocking in at $245 million in February 2023. Overseas Pakistanis in the US remitted $219 million in February 2023, registering a year-on-year increase of 4%.

As per SBP’s latest weekly report, the total liquid foreign reserves held by the country stood at $9.75 billion as of March 3, 2023, compared to $9.26 billion as of February 24, 2023.

During the week under review, SBP’s reserves increased by $487 million to $4.3 billion on the back of another loan from China.

 

[ghazi52]

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Pakistan lost $3.7bn in remittances​

Shahid Iqbal
June 14, 2023

KARACHI: The remittances sent by overseas Pakistani workers dipped month-on-month by 4 per cent and 10pc year-on-year to $2.1 billion in May.

The latest data released by the State Bank of Pakistan (SBP) on Tuesday showed that the country lost $3.7bn in remittances during the first 11 months of FY23 mainly due to a widening exchange rate gap.

The inflows tumbled by 12.98pc to $24.831bn in 11MFY23 compared to $28.489bn in the same period of last fiscal year. The country has been struggling hard to get a $1.1bn tranche from the IMF for a year but the shrinking inflows of remittances could make it more difficult for the country to manage the external account with poor foreign exchange reserves of less than $4bn.

Pakistan received $2.102bn in May compared to $2.198bn in April. It received $2.346bn in May last year.

Currency dealers have consistently been drawing the attention of the government to address the reasons for the decline in remittances but no timely measures were taken to limit the growing role of the grey market which has practically replaced the exchange companies.

The illegal market offers dollar prices more than Rs20 per dollar higher than banking market rate. The exchange companies were facing serious shortage of dollars so the price of greenback gone up open market to come close to the grey market rate. The grey market attracted the remittances.

At the same time, the State Bank permitted importers to arrange dollars for their imports. The importers rushed towards the grey market which further strengthened it and remittances declined due ever increasing dollar rates in the grey market.

The biggest inflow was from Saudi Arabia but was declined by 16.3 per cent to $5.924bn. The 2nd highest inflow was from UAE which was around $4.321bn but it also showed a decline of 19.2 per cent.

Pakistan received 3rd largest amount of remittances from UK which was $3.718bn; it shows a decline of 8 per cent compared to the last year.

Other significant inflows were from USA with $2.824bn (o.9 per cent up), GCC countries $2.918bn (11.5 per cent down) and $2.839bn from EU countries showing a decline of 7.7 per cent.

The labour outflow from Pakistan shows significant increase like previous year but the declining inflows clearly indicate that widening price gap of dollar could be more problematic in the coming months. The dollar officially available at Rs286-287 in the inter-bank market but the grey market offers up to Rs311-313 per dollar.

 

[PakFactor]

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Pakistan lost $3.7bn in remittances​

Shahid Iqbal
June 14, 2023

KARACHI: The remittances sent by overseas Pakistani workers dipped month-on-month by 4 per cent and 10pc year-on-year to $2.1 billion in May.

The latest data released by the State Bank of Pakistan (SBP) on Tuesday showed that the country lost $3.7bn in remittances during the first 11 months of FY23 mainly due to a widening exchange rate gap.

The inflows tumbled by 12.98pc to $24.831bn in 11MFY23 compared to $28.489bn in the same period of last fiscal year. The country has been struggling hard to get a $1.1bn tranche from the IMF for a year but the shrinking inflows of remittances could make it more difficult for the country to manage the external account with poor foreign exchange reserves of less than $4bn.

Pakistan received $2.102bn in May compared to $2.198bn in April. It received $2.346bn in May last year.

Currency dealers have consistently been drawing the attention of the government to address the reasons for the decline in remittances but no timely measures were taken to limit the growing role of the grey market which has practically replaced the exchange companies.

The illegal market offers dollar prices more than Rs20 per dollar higher than banking market rate. The exchange companies were facing serious shortage of dollars so the price of greenback gone up open market to come close to the grey market rate. The grey market attracted the remittances.

At the same time, the State Bank permitted importers to arrange dollars for their imports. The importers rushed towards the grey market which further strengthened it and remittances declined due ever increasing dollar rates in the grey market.

The biggest inflow was from Saudi Arabia but was declined by 16.3 per cent to $5.924bn. The 2nd highest inflow was from UAE which was around $4.321bn but it also showed a decline of 19.2 per cent.

Pakistan received 3rd largest amount of remittances from UK which was $3.718bn; it shows a decline of 8 per cent compared to the last year.

Other significant inflows were from USA with $2.824bn (o.9 per cent up), GCC countries $2.918bn (11.5 per cent down) and $2.839bn from EU countries showing a decline of 7.7 per cent.

The labour outflow from Pakistan shows significant increase like previous year but the declining inflows clearly indicate that widening price gap of dollar could be more problematic in the coming months. The dollar officially available at Rs286-287 in the inter-bank market but the grey market offers up to Rs311-313 per dollar.

One has to look at the policies being enforced in the GCC and broader regions of the world. The highly specialized labor flows into Europe, Canada, and the U.S.A. Over time chain migration will force those Pakistanis to invest and develop in their respective countries. This will eventually limit remittance back home to Pakistan and set the Amristari descendant Khawaja's doti on fire.

The labor force entering GCC will be somewhat specialized, but they'll stay and grow within GCC with favorable resident visa policies. You will see these individuals bringing families, educating them, and sending them to the West. However, I know a lot of small-time labor returning, and for NEOM and other infrastructure development, their tapping into Bengali, Indonesia, and additional labor-ready markets.

Soon, you will have noon league and Pee Pee Pee party scream remittance like Maryum does Imran Khan in the middle of the night.

 

[SQ8]

One has to look at the policies being enforced in the GCC and broader regions of the world. The highly specialized labor flows into Europe, Canada, and the U.S.A. Over time chain migration will force those Pakistanis to invest and develop in their respective countries. This will eventually limit remittance back home to Pakistan and set the Amristari descendant Khawaja's doti on fire.

The labor force entering GCC will be somewhat specialized, but they'll stay and grow within GCC with favorable resident visa policies. You will see these individuals bringing families, educating them, and sending them to the West. However, I know a lot of small-time labor returning, and for NEOM and other infrastructure development, their tapping into Bengali, Indonesia, and additional labor-ready markets.

Soon, you will have noon league and Pee Pee Pee party scream remittance like Maryum does Imran Khan in the middle of the night.

That GCC remittance will slow down quite a but because they have now embedded their millennials into their workplaces and their Gen Z is in full force. The white collar jobs are all going and soon the blue collar might be up for grabs too - then where will Khwaja Sira’s massive remittances go?

 

[PakFactor]

That GCC remittance will slow down quite a but because they have now embedded their millennials into their workplaces and their Gen Z is in full force. The white collar jobs are all going and soon the blue collar might be up for grabs too - then where will Khwaja Sira’s massive remittances go?

Exactly, I was speaking with a cousin of mine who was forced to return because his company reduced its headcount due to automation in the accounting side at a Saudi bank. He recently wanted to apply and get out of Pakistan; his previous hiring manager said they now have a policy that if a company needs outside labor, you must first exhaust the internal pool, and in specific sectors, it's two Saudis for one imported labor. They've forced their females to work in female item stores, banks, etc.

So they're in full labor mobilization mode.

I used to call the Arabs dumb until 2-3 years ago, but now I see them thinking very long-term; they developed the country structure on oil money, knowing it's limited, and headed into the digital age. They've become a digital country within 100 years with a small and limited talent pool and skipping the tiresome and money-heavy industrialization aspect; instead, they've been a high-tech industrialized region.

 

[ghazi52]

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[ghazi52]

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Remittances contract 14pc to little over $27bn in FY23​

Shahid Iqbal
July 11, 2023

KARACHI: Pakistan lost over $4 billion in remittances sent by overseas Pakistan in FY23, much higher than the amount the PMLN-led coalition struggled to secure from the International Monetary Fund (IMF) during the outgoing fiscal year.

Data issued by the State Bank of Pakistan (SBP) on Monday showed that the remittances month-on-month slightly increased by 4pc to $2.183bn in June while it witnessed a 22pc decline when compared with $2.8bn remittances the country received in June 2022.

The country received a total of $27.024bn in remittances during FY23 against a record $31.278bn in FY22, a decline of 13.6 or $4.254bn.

The central bank did not offer any reason for the decline of the remittances but analysts said the government’s effort to keep the dollar at lower than actual rates hit the inflows through banking channels.

Over $4bn lost due to rate cap, political and economic uncertainty

The government tried to maintain the dollar-rupee parity at Rs220 in the first half of FY23, which proved counterproductive and the greenback grossly appreciated in the open market resultantly a grey or black market emerged that started offering Rs20 to Rs25 per dollar higher rates badly hitting remittances.

However, the government under IMF pressure uncap the exchange rate on Feb 26 and immediately the dollar jumped to Rs269. With fluctuations in subsequent months, the greenback reached Rs299 in the interbank on May 11 but remained most of the time in the range of Rs280-290.

“During the entire fiscal year FY23, the country remained under the grip of severe political and economic uncertainties which practically weakened both the economy and the currency,” said Atif Ahmed, a currency dealer in the interbank market.

“Along with the price difference, high-interest rates in the international market have also provided an opportunity for the remitters for earning better returns,” said Samiullah Tariq, head of research and development at Pakistan Kuwait Investment Company (Private) Limited.

The largest inflow was from Saudi Arabia but it also fell by 16.9pc to $6.445bn in FY23. In percentage terms, remittances from the UAE witnessed a contraction of 20.5pc to $4.468bn.

Remittances from all important destinations noted a decline except the US which recorded a slight growth of 0.1pc to $3.090bn in FY23. The inflows from the United Kingdom dipped 9.7pc to $4.056bn.

The inflows from GCC and EU countries fell by 12pc and 7pc to $3.191bn and $3.12bn, respectively, during the outgoing fiscal year.

 

[ghazi52]

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Pakistan’s remittances clock in at just over $2bn in July​

• Inflow 7.3% lower on monthly basis

BR
August 10, 2023

Inflow of overseas workers’ remittances registered a decline to clock in at $2.03 billion in July 2023, a decrease of 7.3% on a month-on-month basis when compared to $2.2 billion in June 2023, showed data released by the State Bank of Pakistan (SBP) on Thursday.

On a yearly basis, the monthly inflow of remittances registered a decline of 19.3%, as they stood at $2.51 billion in the same month of the previous year, data showed.

The decrease in remittances, a vital source of foreign exchange, is a concern for the cash-strapped country.

Experts attributed the decline to seasonal factors as remittances historically post a decline after Eid season.

Breakdown of remittances

Overseas Pakistanis in Saudi Arabia remitted the single largest amount in July 2023 as they sent $486.7 million during the month. However, this was nearly 16% lower than the $577.1 million sent by expatriates in the same month of the previous year.

Inflows from the United Arab Emirates (UAE) registered a significant decline of 31% as they decreased from $455.9 million in July 2022 to $315.1 million in July 2023.

Remittances from the United Kingdom amounted to $305.7 million during the month, a decline of 25% compared to $408.6 million in June 2022.

https://twitter.com/x/status/1689597171400855552

Moreover, remittances from the European Union decreased 4% as they amounted to $283.6 million in July 2023. Overseas Pakistanis in the US sent $238.1 million in July 2023, registering a year-on-year decline of 4%.

 

[ghazi52]

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Remittances - the decline continues!​

BR

The weaknesses in remittances have been visible over the last year or so the foreign inflows remain tepid and continue to fall. FY24 did not start on a positive note as remittances for July 2023 stood at five-month low and also among the weakest months of 2023.

Remittances during July-23 were down by 7.3 percent month-on-month, while the year-on-year declined stood at 19 percent as per the latest released data by the central bank at $2.03 billion.

Remittances sent home by Pakistanis abroad has tapered off significantly in FY23 to $27 billion – declining by 14 percent year-on-year from over $31 billion. The drop in overall remittances come from a decline in remittance from key host countries, substantial spread between the USD interbank rate and the open market /black market rates.

The decline in remittances is ringing alarm bells amid maturing debt obligation payments. Furthermore, the falling remittances are also eating away the gains made in the current account balance. When compared to the peer countries, only Pakistan has suffered a decline in remittances of the top 5 countries receiving remittances that include India, Mexico, China, and Philippines.

The declining remittances are worrisome as the market was expecting some stability in the coming months to allow growth in inflows due to improving exchange rates and the IMF program. However, that’s not visible right now.

 

[ghazi52]

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Pakistan’s remittances clock in at $2.2bn in September, 5.5% higher on monthly basis​

• However, inflow 11% lower year-on-year
• Cumulative figure for July-September stands at $6.33bn, nearly 20% lower compared with same three-month period of FY23