Karachi, June 17, 2021 (PPI-OT): Remittances up 29% YoY in 11MFY21

US$2.5bn worth of Workers remittances flowed into the country during May-2021, registering an increase of 34% YoY. However, starting next month, the massive YoY jumps in remittances that we saw this year may normalize as flows have consistently been north of US$2bn since Jun-2020.

On a sequential MoM basis, we find that the receipts for May-2021 were 10% lower than the record high received during the preceding month. This, as per the Central Bank’s press release, can be attributed to the post-Eid phenomenon. Notwithstanding, the inflows for May remained just above the 10MFY21 average of US$2.4bn.

Cumulatively during 11MFY21, the country has received US$26.7bn in remittances, a substantial US$6bn (29%) higher than the US$20.7bn flows received during the same period last year. As per the central bank’s press release, the phenomenal (not to mention consistent) inflows during the year can be attributed to (1) policy measures that incentivized the use of official channels to transfer funds to Pakistan and (2) limited international travel due to the pandemic.

A country-wise dissection reveals that the three largest contributors to the inflows during 11MFY21 were Saudi Arabia (US$7.0bn, +20% YoY), the United Arab Emirates (US$5.6bn, +10% YoY) and the United Kingdom (US$3.7bn, +67% YoY).