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Thursday, May 23, 2024

PM thanks overseas Pakistanis as remittances 43pc higher YoY

State Bank of Pakistan (SBP), in a tweet today, said that remittances continued their record run of above $2bn for the 9th month in current FY21. Moreover, governor SBP also commented on the improvement in the real economy of Pakistan over the last year, pointing to growth in coming years.

The Prime Minister of Pakistan Imran Khan took to Twitter to thank the Overseas Pakistani community for their love and support as the remittances again see an increase according to the State Bank of Pakistan figures.

According to the State Bank of Pakistan’s statement today, the remittances rose to $2.7 billion in March 2021. It is an increase of 20 percent than February 2021, and 43 percent higher than March 2020.

The statement said that the cumulative increase in the remittances sent is 26 percent for the 9MFY21 compared to the same period of 9MFY20. The remittances during the current fiscal year till date are recorded to be $21.5 billion.remittances

The statement also showed the contribution of different countries in sending remittances for the 9MFY21, with Non-Resident Pakistanis in Saudi Arabia sending the greatest proportion of $5.7 billion, making it 26.7 percent of the $21.5 billion sent to the country this year.

It was followed by the United Arab Emirates with $4.5 billion, the United Kingdom with $2.9 billion, and the United States with $1.9 billion according to the statement.

Read More: Remittances and industry backed rupee hits back at dollar

Among the EU countries, the highest remittances were received from Italy, of value $428.9 million. While in GCC countries, the UAE and Saudi Arabia were followed by Oman with $803.7 million worth of remittances.

According to the statement, in March 2019, the remittances remained at $1.7 billion, while in the same month of 2020, they went up to $1.9 billion. However, a huge jump to $2.7 billion was made in March 2021. It is an increase of a billion dollars in two years and almost $800 million YoY in 2021 from 2020.

According to the statement, the monthly average of remittances has also increased to $2.4 billion in FY21 from $1.9 billion last fiscal year.

According to the State Bank, this increase comes as, “proactive policy measures […]to encourage more inflows through formal channels, limited cross border travel [due to] COVID-19, medical expenses & altruistic transfers to Pakistan amidst the pandemic, & orderly forex market conditions.”

Read More: Remittances exceed $2 billion for 8th consecutive month

Remarks by Mr. Raza Baqir

At this moment, SBP chairman Raza Baqir spoke to the media, “before entering the COVID era, the country had to pursue stabilization measures, and immediately after such measures, the economic indicators take a plunge.”

He mentioned PM’s tweet and mentioned the increase in remittances, adding that, “Eid is approaching, and historically, the country has seen an increase in remittances during Eid days, thus foreign exchange balance will improve thanks to the overseas Pakistanis.”

He then began talking about the ‘Real Economy’ of Pakistan, stating figures for the Large Scale Manufacturing industry of the country. According to the most recent figures in January, the sector saw a 9 percent YoY growth as already reported by the GVS.

He said, “If this ceremony was happening one year ago, LSM growth was -5.7 percent,” meaning that Pakistan is entering the third wave of the pandemic at 9.31 percent compared to last year when the country entered the first wave with a -5.7 percent growth rate of the LSM industry.

9MFY21 saw LSM growth remained at 7.85 percent compared to -3.2 percent for the same period last year.

Moving on to cement sales the governor SBP said, “For March 2021, growth in cement sales is 44% YoY, coming to 5.4 million tons in March 2020.” This is important for the country as the informal sector employment is largely contributed to the construction industry of Pakistan.

Then he began talking about the automobile sector of Pakistan. Sales have grown 35% YoY for February 2021, and for 9MFY21 they are up by 23%.

For Fast Moving Consumer Goods, indicating the consumer demand in the country, Mr. Baqir added, “At the end of the second quarter FY21, the growth in demand of FMCG was 8.7 percent in real terms”, which was on the negative side at the same time last year.

He said that this shows that Pakistan is doing much better this year compared to the last and that Pakistan has a very strong indicator compared to last year.

Read More: Large Scale Manufacturing output increases 9.31% YoY

He said when the first wave and 3rd wave came, there are big challenges like high public debt compared to other emerging markets. Due to this, the government has a limit on giving large fiscal stimulus to the country, so that was kept in mind. Thus, recalibration of spending was done by the government.

With the real economy and remittances rising in March, Mr. Baqir was of the view that the country is heading in the right direction.