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Workers’ remittances increase by 11.5% in October

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1 year ago

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  • SBP says inward remittances stood at $8.8 billion from Jul-Oct. 
  • Remittances increased by 9.6% on YoY basis.
  • Analyst credits crackdown against hundi/hawala for increase. 

KARACHI: The remittances from the overseas workers were recorded at $2.5 billion in the month of October making it an increase of 11.5% month-on-month basis, said the State Bank of Pakistan (SBP) in a statement on Friday.

“In terms of growth, during October 2023, remittances increased by 11.5% on month on month and 9.6% on year on year basis,” said the central bank.

The central bank also shared that in the first four months of the ongoing fiscal year, the inward remittances stood at $8.8 billion.

Workers’ remittances increase by 11.5% in October

As per the SBP, out of the $2.5 billion, Pakistani workers from Saudi Arabia sent $616.8 million, United Arab Emirates was second with $473.9 million, remittances from United Kingdom were recorded at $330.2 million and $283.3 million was sent from the United States.

Former economic adviser to the Ministry of Finance Dr Khaqan Najeeb credited the closing of the exchange rate between the open and interbank markets and curbing of illegal exchange for the increase in remittances.

“Closing of the exchange rate between the open market and interbank has helped remittances flow through the formal sector increasing the October remittances by nearly $300 million compared to last month,” said Dr Najeeb.

The economist states that the recent “enforcement measures” undertaken by the government against the illegal exchange market had helped bring down the demand for smuggling for dollarisation and also control hundi/hawala.

“This has all helped channelise remittances through the interbank,” said Dr Najeeb. He added that the increase in remittances from the Middle East was an indicator that hundi/hawala was declining as these countries have a higher percentage of the hundi/hawala business.

“This overall is contributing to the improvement in the remittances in October,” said the economist.

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Business

Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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