Raza Khan

The remittances sent by overseas Pakistanis from member countries of the European Union (EU) witnessed a decline of 11.77% during the first six months of the current financial year. According to the data available with WealthPK, remittances sent to Pakistan from 10 countries of the European Union, including Italy, Spain, Germany, France and Greece, posted negative growth during the first half of the ongoing fiscal.

The remittance from EU member countries dropped to $1.544 billion during the first six months of the current financial year from $1.750 billion during the corresponding period of the previous fiscal, showing a decline of 11.77%. Dr Sajid Amin, the deputy executive director of the Sustainable Development Policy Institute (SDPI), told WealthPK that the main reason for the decline in remittances from western countries was the rising inflation. “The current economic crunch in the UK, EU and the United States has affected the inflow of remittances,” he added.

He said that the cost of living for the Pakistani diaspora in Europe went up as energy prices soared in recent months as a result of the conflict between Russia and Ukraine. “Overseas Pakistanis are finding it difficult to send more money back home,” he added. Dr Sajid Amin said that the second reason for the decrease in remittances was a big difference in the prices of the dollar in the interbank and open market. “People don’t send their money through banking channels as they get a good margin of the exchange rate in the open market,” he added.

He said that the government must let the Pakistani rupee adjust to the market or it would plunge forcefully with more panic and uncertainty. “Exchange rate is a price. It must be left to the market like prices of other items,” he added. Remittances sent by Pakistani workers from abroad are an important component of the national economy. The foreign exchange reserves of Pakistan are being depleted owing to external debt servicing. The country needs remittances to keep the economy afloat.

According to the State Bank of Pakistan (SBP), remittances from Italy declined by 6.1% during the first half of the current fiscal and dropped to $419.8 million from $ 447.3 million during the corresponding period of the previous financial year. Pakistani workers in Spain sent home $250.1 million during the first six months of the ongoing financial year, as compared to $263.9 million in the corresponding period of the previous fiscal, showing a decrease of 5.2%.

Remittances from Germany dipped to $235.1 million during the period under review from $260.2 million in the same months of the last fiscal, posting a negative growth of 9.6%. Pakistan received $214.6 million from France as remittances during the first half of the current fiscal, showing a decline of 16.7% against $257.6 million in the corresponding period of the previous year.

A decline of 6.2% was also recorded in remittances inflow from Greece. Remittances from Greece dropped to $177.8 million during the period under review from $189.5 million in the last year. Similarly, remittances from the Netherlands, Sweden, Denmark, Ireland and Belgium declined by 12.1%, 4.1%, 8.3%, 23.4% and 40.1%, respectively. The remittances inflow from these countries also dropped during December.

Remittances inflow from Saudi Arabia, United Arab Emirates and the United Kingdom also posted a negative growth during the first half of the current fiscal. However, remittances from the US posted a growth of 2.2%, according to the data available with WealthPK.

Credit : Independent News Pakistan-WealthPk