Remittances in June 2023 registered a decrease of 21.4 percent on a year-on-year (YoY) basis and dropped to the $2.2 billion mark compared to $2.8 billion in June 2022, according to data issued by the State Bank of Pakistan (SBP).
Meanwhile, cumulative remittances sent by overseas Pakistanis for the 12 months that ended on June 30, 2023, have dropped to $27 billion, down by 14 percent in the financial year 2022-23, as compared to the all-time high inflows of $31 billion reported in the previous financial year.
Remittances received by the country from overseas Pakistanis were up 3.85 percent on a month-on-month basis from $2.102 billion in May to $2.18 billion in June 2023.
Remittance inflows during June 2023 were primarily sourced from Saudi Arabia ($515 million), the United Kingdom ($343 million), the United Arab Emirates ($325 million), and the United States ($272 million).
Proceeds from expats residing in the European Union countries increased by 11 percent on a MoM basis in June 2023, coming in at $272 million. Similarly, remittances from other GCC Countries (Bahrain, Kuwait, Qatar, and Oman) stood at $271.9 million.
The decreasing inflows reported for FY23 were due to various austerity measures taken by the coalition government and the banking regulator, including high taxes on cash in banks, and exchange companies for higher collections of remittances.
Import restrictions together with poor domestic economic conditions during FY23 marginalized remittance inflows, which compressed demand and diverted most ex-pat inflows to informal currency exchange channels.
Essentially, policy-induced contraction in imports coupled with demand compression, exchange rate depreciation, and people’s preference for undocumented channels for better profits curbed remittance inflows during FY23 and failed to adequately facilitate expatriate Pakistanis living in different countries.
Source: Pro Pakistani