$6.4bn remittances earned by Pakistan

Karachi: Overseas Pakistanis sent $6.4 billion to the country in five months of this current fiscal year.

The remittances are the backbone of economy, when it comes to external accounts which have been in a serious trouble for the last couple of years.

It is observed that even with increasing dependence on remittances, the new government is yet to announce incentives for a sustained growth in remittances.

Banking circles noted that export of laborers from Pakistan was much slower which may impact volume of remittances in next three to five years.

Remittances grew by 15pc during the five months of the last year while the State Bank reported on Tuesday that the five- month growth was slightly above 7pc.

The current account deficit for the first four months of the current fiscal year was $1.4bn while it was surplus with $14 million during the same period of last year.

Since the State Bank’s reserves fell to $3bn, the widening deficit is taken as warning by experts and bankers.

The State Bank reported that inflows from Saudi Arabia, UAE, and US increased during the period as remittances from these destinations stood at $1.79bn, $1.29bn and $1.02bn, respectively.

Experts said most of repayments to IMF have been made under the Standby Agreement while rest of money would be paid in small installments till 2015 which would not hit as badly as it did during the last two years.