Karachi, May 11, 2023 (PPI-OT): Seasonal uptick in remittances to provide some relief
After reporting a sharp decline between Nov-2022 to Feb-2023, remittances have rebounded in the last two months. Remittances averaged at US$2bn/month during the 4 months mentioned, now increasing to US$2.5bn/US$2.2bn in Mar-2023/Apr-2023, likely over seasonal uptick from Ramadan and Eid.
For 10MFY23 however, data reports a 13% YoY decline, with sharper decline of 15% YoY from the Middle East (50%+ contribution to total remittances). This has resulted in Pakistan to lose ~US$2.5bn worth of annual remittances from this region alone.
Despite likelihood of some post Eid decline in remittances, the uptick is a good omen, which combined with other efforts towards limiting US$ outflow by regulators and the government in place since many months could elongate the trend of current account surplus (that began in Mar-2023), providing respite to county's dwindling FX reserves.