Workers’ remittances remain strong in August 2020

KARACHI: In August, workers’ remittances remained above $2 billion for the third month in a row. They reached $2.095 billion, which is 24.4 percent higher than during the same month last year and largely in line with SBP projections.

Over the last three months, remittances reached an unprecedented level of $7.3 billion, 37.2 percent higher than the same period last year, SBP said.

Efforts under the Pakistan Remittances Initiative (PRI) and the gradual re-opening of businesses in major host countries such as Middle East, Europe and United States contributed to this increase.

The top three originating countries for remittances in August were: Saudi Arabia ($0.593 billion), UAE ($0.410 billion) and UK ($0.302 billion).

On a m/m basis, remittances were 24.3 percent lower than the record level of remittances of $2.768 billion posted in July, mainly reflecting the usual seasonal decline in the post Eid-al-Adha period.

According to Fitch Ratings, five Asian nations including Pakistan that their credit ratings may be impacted due to a potential decline in foreign currency inflows on account of workers’ remittances and subsequent higher need for foreign financing in the second half of 2020.

The global credit rating agency said the receipt of record high remittances by Pakistan consecutively in June and July was due to temporary factors.

The receipts are set to drop due to a squeeze on income and loss of jobs by the expatriates abroad in the wake of Covid-19 pandemic and an international oil pricing crisis, particularly in the Gulf countries from where Islamabad attracts more than half of the total remittances every month, it said.