In a momentous event, Pakistan reached a record-breaking $3.24 billion in worker remittances sent home by non-residents on Friday, May 20, 2024. This spike implies that the current account balance would continue to be in excess for a fourth consecutive month.
In the month under review, before Eid Ul Azha fell on June 17, inbound remittances increased by 54% to a record high level, according to figures from the State Bank of Pakistan (SBP), from $2.10 billion in May of the previous year.
Experts in finance saw that inflows were far greater than anticipated. It is important to remember that Pakistan last received $3.12 billion in remittances in April 2022, which was the biggest amount ever.
In contrast to the nominal deficit of $202 million in the first ten months, there was a high anticipation that the cumulative current account deficit would change into a surplus for the first 11 months of the current fiscal year, ending in May 2024, due to the exceptional rise in revenues. In the near term, this increased infusion of capital may also assist stabilize the nation’s foreign exchange reserves and keep the rupee strong vs the US dollar.
Remittances from workers increased 7.7% overall in the first 11 months of FY24, to $27.09 billion, from $25.15 billion in the same time the previous fiscal year. The inflow increased 15% in the month over April.
Remittances from Saudi Arabia increased by 56% to $819 million in May of this year from $524 million in the same month previous year, according to the central bank’s data breakdown. From $336 million in the same month last year, inflows from the United Arab Emirates (UAE) more than quadrupled to $668 million in the current month.
Remittances from Pakistanis living abroad totaled $473 million in February, up 54% from $306 million in the same month the previous year.
Remittances from Pakistani expats living in the US, meanwhile, were an amazing $360 million, a 40% increase from $257 million in May 2023. In May 2024, they transferred $340 million in remittances to Pakistan from nations inside the European Union (EU), a 36% increase from $249 million in the same month the previous year.
