IN a positive development, remittances by Overseas Pakistanis reached almost three billion dollars in August 2024, marking a significant 40.5% increase compared to the same month last year. Cumulatively, remittances surged by 44% to $5.94 billion in the first two months (July-August) of the current fiscal year 2024-25, compared to the same period last year.
This is surely encouraging as the average monthly inflow of nearly $3 billion during the first two months of FY25 is notably better than the full-year average of $2.68 billion per month in FY24, which shows the country can increase significantly during the year if the momentum is kept in the shape of prudent economic and monetary policies as well as incentives for overseas Pakistanis. There are reasons to expect an upward trend in remittances, especially from the Middle-East countries, as recently State Bank of Pakistan and the Arab Monetary Fund (AMF) signed a Memorandum of Understanding (MoU) in Abu Dhabi to establish a framework of cooperation between Buna, the cross-border payment system operated by Arab Regional Payments Clearing and Settlement Organization “ARPCSO”, owned by AMF, and Raast, Pakistan’s Instant Payment System. The integration of Raast with Buna aims to facilitate Cross-border Remittances between the Arab region and Pakistan through formal channels. This initiative will benefit individuals as well as businesses not only through instant, safe and cost-effective cross border payments, but also by strengthening economic, financial and investment ties between the Arab countries and Pakistan. Incidentally, a major growth in remittances has been recorded from the Gulf countries, particularly Saudi Arabia and the United Arab Emirates (UAE). Remittances from Saudi Arabia surged by 45% to $713 million in August 2024, compared to $491 million in the same month last year. Remittances from the UAE also saw significant growth, rising 75% year-on-year to $538 million, up from $308 million in August 2023. The surge in remittances is attributed to the exchange rate stability and an increase in the number of Pakistanis proceeding to these two countries for employment. More and more Pakistanis, especially skilled and educated youth, are seeking employment abroad in view of squeezed job opportunities in the country. The number can increase further if pragmatic strategies are drawn to export manpower as per requirements of overseas markets and more incentives are given to those opting to send money through formal channels.
