Remittances inflows drop 10.5% MoM in September of FY23

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rupee dollar interbank

Islamabad: Remittances inflows from overseas Pakistanis dropped by 10.5% on a month-on-month basis in September of the fiscal year 2023, the State Bank said in a report on Tuesday.

According to the SBP’s monthly report on the status of workers’ remittances, total inflows amounted to $2.437 billion in September of FY23. Compared to the $2.724billion received in August, this is a 10.5% drop.

On a year-on-year basis, the remittances also went down by 12.3% as the total inflows recorded in September of FY22 amounted to $2.779 billion.

Cumulatively, in the first quarter of FY23 (July – September), total inflows amounted to $7.684 billion. Compared to the same period last year, when inflows amounted to $8.198 billion, this time has witnessed a drop of 6.2% in remittances inflows.

Countrywise, Saudi Arabia topped the list of the biggest contributor via workers’ remittances with $616.6 million during September, down from $691.8 million recorded a month earlier.

Similarly, inflows amounted to $474.3 million from the United Arab Emirates, down from $531.4 million in August.

From the United Kingdom, remittance inflows amounted to $307.8 million, down from $369.7 million in August.

Pakistan heavily depends on the influx of remittances to meet its foreign exchange needs because exports hardly cover the high level of imports.

Trade deficit of Pakistan declines 21.42% YoY in first quarter of FY23

The trade deficit of Pakistan recorded in the first quarter of the fiscal year 2023 declined 21.42% on a year-on-year basis, the Pakistan Bureau of Statistics (PBS) reported earlier this month.

According to the provisional data on monthly trade statistics by PBS, during the first quarter of FY23 (July-September), the trade deficit amounted to $9.2 billion. Compared to the deficit of $11.7 billion recorded during the same period of FY22, that is a sharp 21.42% decline.

The total imports during the first quarter stood at $16.3 billion compared to $18.71 billion recorded last year during the same period. Meanwhile, on a YoY basis, exports rose to $7.1 billion from $6.99 billion recorded last year in the first quarter.

August trade deficit swells to $3.5 billion MoM

In September alone, the trade deficit clocked in at $2.88 billion, falling from August’s $3.58 billion. The imports in September fell to $5.26 billion from $6 billion on a month-on-month basis. Exports, however, also recorded a slight decline on an MoM basis in September as they fell to $2.38 billion from $2.48 billion.

It should also be noted that the trade deficit of Pakistan recorded a whopping increase of 55.7% during the fiscal year 2022, taking the total imbalance between imports and exports to $48.38 billion. Fuelled by the soaring trade imbalance and rising current account deficit, the forex exchange reserves have fallen to the $8 billion level as of September 23.

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