US and UK are biggest remittance senders to Pakistan

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Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO of FXcompared and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely… Read more
  • Remittances in Pakistan saw robust growth in Q1
  • Money coming from overseas workers based in the Gulf did not see much growth as compared to remittance inflow from the United Kingdom and the United States
  • The central bank said that the overall growth is at 13.2%

 

Remittances sent to Pakistan has shown robust growth in the first quarter of 2019 and the bulk of the inflow is coming from overseas workers based in the United Kingdom and the United States.

The United Kingdom is home to a large Pakistani population, the largest in Europe based on the recent census. There are currently over 1.7 million Pakistanis in the UK, the Pakistani government says. In the United States, the Pakistani diaspora is about to reach 400,000.

The remittance growth in Pakistan reached 13.2% and the inflows have crossed the USD 5 billion mark. Pakistani officials told the media that this is the first time for the country to receive such an amount from its workers overseas, noting that the outlook for the country’s remittance inflow is quite positive.

Official data has revealed that the growth is more prominent in the UK and the US as compared to money sent from the Gulf. While Pakistani workers based in the region transfer money internationally on a regular basis, those who work in the UK and the United States are reportedly sending more. There are several factors as to why this is so, Pakistani officials say.

The first factor may be due to the increased economic activity in said nations. Officials note that this may have given the Pakistani diaspora more reason to send more money back home. The State Bank of Pakistan included this in its first quarterly report.
Aside from this, the government says that remittance inflow usually sees an uptick before Eid-ul-Azha, a religious activity that involves sacrificing livestock. Many migrants whose families observe the holiday ensure that money is sent home to buy sacrificial animals even if overseas transfer rates are expensive.

It is noted that remittances from the Gulf only saw marginal growth in Q1 of the fiscal year. Saudi Arabia in particular saw very little growth. This, however, is not surprising, according to observers, as there has been a steady decline of remittances coming into Pakistan from those corridors. Seasonal spikes still happen though, but they are often small.

Inflows from Saudi Arabia grew by 2.8%, according to the central bank, while those coming from the Gulf grew by 4%. The state bank adds that this may be due to the layoffs that have been happening in the region in the past few months.

 

Remittances coming from the Pakistani diaspora remain a major source of financing for the country’s persistent trade deficit. Remittances, in general, play a major role in the developing world, according to a recent report by QY Research, an American research company. The Pakistani government is reportedly very supportive of its overseas workers as they are keeping the country afloat.

Get the latest updates from the remittance industry by following our magazine here.

 


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