In a recent announcement by the State Bank of Pakistan on Thursday, the country received a substantial inflow of workers' remittances, totalling a noteworthy $2 billion during the month of July 2023. While this figure remains impressive, it is important to note that there has been a noticeable decrease in growth compared to previous periods.
According to the provided data, the remittances experienced a decline of 7.3 per cent on a month-on-month basis and a more substantial decrease of 19.3 per cent on a year-on-year basis. This reduction in remittance growth can be attributed to a variety of factors, with one of the prominent ones being the reduced number of working days due to the celebration of Eid. July saw only 17 working days, down from 22 in the previous month and 18 in the same period of 2021.
Experts have pointed out that while the decrease in remittance growth is a concern, the unique circumstances of Eid and the subsequent impact on the number of working days have played a significant role in shaping this trend. This phenomenon is in line with previous years where similar fluctuations have been observed around the time of Eid celebrations.
Breaking down the sources of these remittances, the data shows that the major contributors to Pakistan's remittance inflow during July 2023 were Saudi Arabia, the United Arab Emirates, the United Kingdom, and the United States of America. Saudi Arabia led the pack with an impressive $486.7 million, followed by the UAE with $315.1 million, the UK with $305.7 million, and the USA with $238.1 million.
While the decrease in remittances growth might raise concerns, experts remain cautiously optimistic, citing the influence of Eid and its impact on working days. It is expected that as the year progresses and the holiday-related fluctuations settle, a more accurate picture of remittance growth will emerge.
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