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Pakistan's Remittances rise to all-time high of $2.8bn in April, up 56% YoY

N.Siddiqui

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Enjoy them! And then notice how many imported goods are freely available there too.
Luxury food item imports are minuscule...


2019 figure.
Pakistan’s Top 10 Imports

The following product groups represent the highest dollar value in Pakistan’s import purchases during 2019. Also shown is the percentage share each product category represents in terms of overall imports into Pakistan.
  1. Machinery including computers: US$5 billion (13.3% of total imports)
  2. Electrical machinery, equipment: $4.6 billion (12%)
  3. Iron, steel: $2.3 billion (6.1%)
  4. Mineral fuels including oil: $2.2 billion (5.9%)
  5. Organic chemicals: $2 billion (5.2%)
  6. Plastics, plastic articles: $1.8 billion (4.7%)
  7. Cotton: $1.7 billion (4.4%)
  8. Manmade filaments: $1.5 billion (3.9%)
  9. Vehicles : $1.2 billion (3.1%)
  10. Oil seeds: $1 billion (2.7%)

 

VCheng

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Luxury food item imports are minuscule...


2019 figure.
Pakistan’s Top 10 Imports

The following product groups represent the highest dollar value in Pakistan’s import purchases during 2019. Also shown is the percentage share each product category represents in terms of overall imports into Pakistan.
  1. Machinery including computers: US$5 billion (13.3% of total imports)
  2. Electrical machinery, equipment: $4.6 billion (12%)
  3. Iron, steel: $2.3 billion (6.1%)
  4. Mineral fuels including oil: $2.2 billion (5.9%)
  5. Organic chemicals: $2 billion (5.2%)
  6. Plastics, plastic articles: $1.8 billion (4.7%)
  7. Cotton: $1.7 billion (4.4%)
  8. Manmade filaments: $1.5 billion (3.9%)
  9. Vehicles : $1.2 billion (3.1%)
  10. Oil seeds: $1 billion (2.7%)

And how many of these categories are indirectly dependent on the spending of those who receive the remittances?
 

Chakar The Great

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Guess who fills up their large SUVs as the petrol pumps to add to the import bills? For example.
Again what's your point? People stop driving SUVs? Stop buying petrol.


Pakistan is not buying anything non essential, compare it with other countries


Mexico $ 433 Billion USD

Brazil $ 180 Billion USD

Vietnam $ 234 Billion USD

Pakistan. $ 50 Billion USD

Bangladesh $ 65 Billion USD



Pakistan needs Oil and Machinery for industry. So imports are not a problem. We need to increase exports.
 

VCheng

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Again what's your point? People stop driving SUVs? Stop buying petrol.


Pakistan is not buying anything non essential, compare it with other countries


Mexico $ 433 Billion USD

Brazil $ 180 Billion USD

Vietnam $ 234 Billion USD

Pakistan. $ 50 Billion USD

Bangladesh $ 65 Billion USD



Pakistan needs Oil and Machinery for industry. So imports are not a problem. We need to increase exports.
The point is that remittances may help with the BoP, but it is toxic in that they create their own patterns of demand that perversely cause imports to rise far above what they would be otherwise. Lauding remittances as a financial panacea is foolish, for they do not replace the correct solution that you mention: actually increasing exports.
 
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N.Siddiqui

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And how many of these categories are indirectly dependent on the spending of those who receive the remittances?

You have a point here, remittances are send by most of the diaspora as a financial support to run a household, looking at the huge blue collar jobs of Pakistanis in Saudia, UAE, other Arab countries, they are from KPK and FATA mostly, barely makes a sustenance living, no extra disposal income for luxuries.

Yes a small group of 2-5% of the families getting remittances must be splurging on the extravagance, could be lower.

One reason for the CAD to end is the imports curbs and the extra taxes imposed on luxury items, 20 billion USD CAD few years ago is now in the positive.

One reason is lower imports, luxury items specially.
 

VCheng

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You have a point here, remittances are send by most of the diaspora as a financial support to run a household, looking at the huge blue collar jobs of Pakistanis in Saudia, UAE, other Arab countries, they are from KPK and FATA mostly, barely makes a sustenance living, no extra disposal income for luxuries.

Yes a small group of 2-5% of the families getting remittances must be splurging on the extravagance, could be lower.

One reason for the CAD to end is the imports curbs and the extra taxes imposed on luxury items, 20 billion USD CAD few years ago is now in the positive.

One reason is lower imports, luxury items specially.
It is not just luxury items. Houses, construction materials, energy costs, etc and it is not the percentage of families that is important, but the percentage of their revenues in the overall economic pie. It is certainly enough to cause adverse distortions.
 

Hakikat ve Hikmet

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I am pretty sure it can easily reach $4b mark...

It shows how much money laundering and illegal transferring are occurring....

FATF has become a blessing in disguise....

Now that the Taliban is cleansing Afganistan further more to come in $ sector....
 

TheDarkKnight

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And how many of these categories are indirectly dependent on the spending of those who receive the remittances?
Can you backup your claims with figures or sources. Is your argument that Pakistanis end up importing chocolates and makeup from the $28+ Bln remittances ? The major import items are energy, machinery and other industrial inputs. Unless you are saying remittances of 28bln dollars end up causing imports of more than the input into the country ( ie 28 bln +) then that clearly breaks the law of conservation of matter for me.
 

cloud4000

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The increased remittances are required given the inflation in the country, especially basic foodstuffs.
 

VCheng

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View attachment 745066

It‘s not the most expensive chocolate but it’s from Germany :D!
German chocolates are generally quite good.
Can you backup your claims with figures or sources. Is your argument that Pakistanis end up importing chocolates and makeup from the $28+ Bln remittances ? The major import items are energy, machinery and other industrial inputs. Unless you are saying remittances of 28bln dollars end up causing imports of more than the input into the country ( ie 28 bln +) then that clearly breaks the law of conservation of matter for me.
You could try reading the rest of the thread including several of my replies above.
 

hydrabadi_arab

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Wow that's massive.


I remember when last year the remittances were going up Patwaris were telling us that reason behind that was because overseas Pakistanis were selling every thing abroad and returning home with all the money. What happened now??


If by the end of the year its US 29 $ Billion, that would be huge.


Imran Khan is right, Pakistanis living abroad are real assets of Pakistan. More people need to be sent abroad specially for white colour jobs. We should target around 50 billion dollars per year over the next 5 years.
$50 billion is possible by 2025.
May be not Lambos, but Pakistani markets are full of imported goods to cater to the demand created by all the recipients of the remittances for some reason.
Not true at all. Imported products are like 2-4 time more expensive compared to local alternatives. Looks like you never been to Pakistan for long time. From chocolate to pampers, all are available locally made. Remmitances receivers cannot afford imported products. Recently I saw chocolate bar that cost $1-2 in Europe but in Pakistan Rs1000. Thats like $7! Local alternative cost $1.

The problem is smuggled products, its money being thrown in to blackhole without government getting any benefit. But this gov is working to eliminate smuggling and is so far doing quite good job.
 

VCheng

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Not true at all. Imported products are like 2-4 time more expensive compared to local alternatives. Looks like you never been to Pakistan for long time. From chocolate to pampers, all are available locally made. Remmitances receivers cannot afford imported products. Recently I saw chocolate bar that cost $1-2 in Europe but in Pakistan Rs1000. Thats like $7! Local alternative cost $1.

The problem is smuggled products, its money being thrown in to blackhole without government getting any benefit. But this gov is working to eliminate smuggling and is so far doing quite good job.
And yet there are so many people buying those $7 chocolates. And the supply, legal and illegal, will find a way to meet that demand. Please keep in mind that remittance receivers are immune from the inflationary effects of the devaluation of the PKR.
 

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