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Amid low foreign direct investment (FDI) and nominal export growth, the Pakistan Industrial and Traders Associations Front (PIAF) on Sunday said that foreign remittance flows are crucial to supporting the country's financial balance, Frontier Post reported.
The PIAF Chairman, Faheemur Rehman Saigol, said that overseas Pakistanis living in the Gulf should be further motivated to maintain upward momentum in remittances, as they contributed more than 60 per cent of the total inflows during the last couple of months. He said that remittances can help not only in financing the deficit in import payments but also in foreign debt repayments. He further suggested the government focus on structural reforms to revive Pakistan's economic growth, with a major focus on incentives for overseas Pakistani workers. The PIAF Chairman said that Pakistan has been witnessing a significant decline in workers' remittances on a year-on-year basis, however, it surged by 5.34 per cent on a month-on-month basis, reaching a total of USD 2.21 billion. Faheem Saigol said that remittances for September came in at USD 2.21 billion, according to data shared by the State Bank of Pakistan. This figure, while an improvement from last month's USD 2.09 billion, was significantly lower than market expectations of USD 2.4-2.5 billion. On a month-on-month basis, remittances rose by 5.3 per cent. However, they declined by 11.24 per cent compared to last year, when remittances stood at USD 2.49 billion, according to Frontier Post. In a statement, the PIAF Chairman asked the government to announce an attractive package for overseas Pakistanis to enhance the volume of foreign inflows because this is the only hope that can support the country's account balance, as the remittances have started declining, showing a huge fall during the last month. If the falling trend persists in the remaining months of this fiscal year, it could pose serious problems for the economic managers as the government heavily relies on remittances, which are much higher than the country's total export proceeds, Frontier Post reported. Notably, Arab countries contribute about 55 per cent of the total remittances. In FY23, Pakistan received USD 27.3 billion in remittances compared to USD 31.2 billion in FY22, showing a shortfall of USD 4.2 billion. This shortfall was a cause for concern as the country faced a default-like situation at the beginning of the current fiscal year, FY24. It is believed that this USD 4.2 billion was either sold in Dubai at much higher rates or sent home through illegal channels, according to Frontier Post. (ANI)
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