Staff Reporter
Lahore
As the country received 1.43 percent lower remittances amounting to $5.47 billion in first quarter of 2019-20 compared to $5.55 billion in the same period of previous year the Pakistan Industrial & Traders Association Front has suggested the prime minister to announce incentives for overseas Pakistanis to push up foreign inflows.
In a joint statement issued here on Sunday, PIAF Chairman Mian Nauman Kabir and Vice Chairman Jawed Siddiqui, expressing their concern over the drop, observed that remittances could help in partly financing the deficit in import payments and foreign debt repayments.
PIAF Chairman suggested the government that structural reforms can revive Pakistan’s economic growth with major focus on incentives for oversees Pakistanis workers. If government support overseas Pakistanis and provide them incentives, they can play a vital role in boosting Pakistan’s economy through their remittances and investments for high economic growth.
Mian Nauman Kabir said that the government’s efforts raised the question mark taken under Pakistan Remittance Initiative to support the higher remittance flows in the FY20. The government targets workers’ remittances to reach the level of $24 billion during the current fiscal year of 2019-20 have created doubt now.
He said that the drop in remittances is disappointing despite the fact that the SBP has allowed exchange companies to start work on directly attracting worker remittances from the countries from where the inflows remain nominal.
Mian Nauman Kabir noted that migrant cash flow, which is a lifeline for the country’s struggling current account deficit, is expected to weaken more in the coming months as the US economic slowdown and its trade war with China hits global economy.
According to the data of the central bank, Pakistani living abroad sent 17 percent less money home in August compared with the previous month of July 2019, remitting $1.69 billion in August 2019 from $2.039 billion in July, showing a decline of $348.4 million on month-on-month basis.
Remittances, one of the country’s biggest sources of foreign currency, fell 8.37 percent in the first two months of the current fiscal year of 2019-20, standing at $3.73 billion during Jul-Aug FY20 compared with $4.07 billion recorded in the same period last year.
PIAF Vice Chairman Jawed Siddiqui, lamenting the gloomy picture of country’s position in the region with regard to its GDP growth in 2019, said that upward trend in September remittances to Pakistan from overseas workers is a positive news for the country’s economy. He said that it is also good news for the country that Pakistan’s trade deficit has narrowed but exports are almost flat despite huge depreciation in rupee.
Jawed Siddiqui said the growth of 18 percent in remittances in Sept to $1.74 billion compared to $1.48 billion of last year’s Sept gives some positive hope. He said that the growth has also helped increase overall inflows in the Jul-Sept quarter. A significant drop in remittances in the second month of August of the quarter had a notable negative effect on the overall growth in the quarter.
