Remittances to Pakistan Soar to $3 Billion in July 2024, Marking a 48% Increase
According to the latest data from the State Bank of Pakistan (SBP), remittances to Pakistan surged by 48% in July, reaching $3 billion despite a 5% month-on-month decline.
Stabilization in the exchange rate, driven by a decrease in the current account deficit, enhanced foreign inflows, and a narrowed gap between open and interbank rates, contributed to this steady influx of $3 billion in monthly remittances. Additionally, administrative measures to curb illegal dollar trade, foreign currency hoarding, and the operations of hawala/hundi have played a crucial role.
Data from the SBP highlighted Saudi Arabia as the largest source of remittances, which grew by 56% to $761 million in July. Additionally, remittances from the United Arab Emirates saw a remarkable 94% increase to $611 million. The United Kingdom and the United States also reported significant rises, sending $443 million and $300 million, respectively.
These remittances play a crucial role in supporting Pakistan’s external account, boosting economic growth, and enhancing the disposable incomes of many households. Despite expected increases in trade and services deficits and payments related to interest and profit repatriation, there is potential for a current account surplus in July.
However, the current account faced challenges, posting deficits in May and June due to higher dividend and profit payments and a seasonal uptick in imports. These deficits overshadowed notable gains in exports and worker remittances.
In June alone, the deficit widened by 33% to $329 million, leading to a current account deficit of $681 million for FY24, about 0.2% of the GDP.
