Remittances Soar to $3 Billion in August: A 40.5% Rise from Last Year
Pakistan’s remittances have seen a significant surge, reaching nearly $3 billion in August 2024. Remittances Soar to $3 Billion marks a 40.5% increase compared to the same month last year.
Key Factors Contributing to the Growth
- Stability of the rupee against the dollar
- Surge in overseas employment, particularly in the Middle East
Region-Wise Breakdown
- Saudi Arabia: 45% increase to $713 million
- UAE: 75% increase to $538 million
- UK: 44% increase to $475 million
- EU: 29% increase to $376 million
- US: 23% increase to $322 million
- Other GCC countries: 29% increase to $281 million
- Other parts of the world: 42% increase to $237 million
Expert Insights
Tahir Abbas, Head of Research at Arif Habib Limited (AHL), attributes the growth to increased employment opportunities in the Middle East. He projects that remittances could reach a new all-time high of over $35 billion for the full fiscal year FY25.
Challenges Ahead
- Depreciation of the rupee
- Lower-than-expected growth in the domestic economy
Recommendations to Solve Remittances Soar to $3 Billion Problem
- Maintain a vigilant watch on the disparity between the rupee-dollar exchange rates
- Keep the difference within the IMF’s recommended maximum limit of 1.25% (around Rs3.50 per dollar)
Future Outlook
The State Bank of Pakistan’s decision to increase profit margins for banks and authorized exchange companies is expected to encourage more remittances through official channels. With the current growth momentum, Pakistan’s remittances are likely to continue rising, providing a much-needed boost to the country’s economy.
Impact on the Real Estate Sector
The surge in remittances is also expected to have a positive impact on Pakistan’s real estate sector, as overseas Pakistanis invest their earnings in the country’s property market. This could lead to increased demand for housing and commercial projects, driving growth in the sector. Developers like Narkin’s Builders, who offer high-quality projects like Classic Homes and Palm Residency, are likely to benefit from this trend.
