Remittances remain above $2b

KARACHI:
Pakistan once again created history with over $2 billion worth of workers’ remittances for the sixth consecutive
month in November, which helped the country to continue to meet its international payment obligations.
“More good news for Pakistan’s economy as workers’ remittances continued to grow in November - remaining
above $2 billion for a record sixth consecutive month,” said Prime Minister Imran Khan in a tweet on Friday.
“According to the SBP, they rose to $2.34 billion, up 2.4% over the previous month and 28.4% over November
2019.”
Cumulatively, in the first five months (July-November) of current fiscal year, remittances grew 27% to $11.77
billion compared to the same period of last year, revealed figures released by the central bank on Friday.
The State Bank of Pakistan (SBP) said persistent efforts by the government and central bank to bring remittances
under the Pakistan Remittance Initiative (PRI) and rising use of digital channels amid limited cross-border travel
were some of the important factors behind the sustained improvement in workers’ remittances.
In a statement, the SBP pointed out that orderly exchange market conditions and improvement in global economic
activity lent further support to the increase in remittances.
Taurus Securities Head of Research Mustafa Mustansir said that the growth in remittances came because Pakistanis,
who had lost their jobs abroad, were transferring their savings ahead of their return home amid the Covid-19
pandemic.
The situation would normalise in the second half (JanuaryJune) of current fiscal year 2020-21, meaning that the
spell of layoffs would come to an end and remittances would slow down during that period, he said. “Cumulatively,
workers’ remittances are estimated to grow 6.5% to $24.6 billion in FY21 (compared to $23.1 billion in FY20),” he
said.
His brokerage house projection is more optimistic compared to the central bank’s anticipation in its Annual Report
for 201920, which saw remittances in the range of $22-23 billion in FY21. Remittances are one of the two major
sources of foreign income for the country.
The growth in remittances has offset the impact of stagnant export earnings so far in the current fiscal year as the
country utilises the inflows to make import payments and foreign debt repayments. On average, the workers’
remittances have been about half a billion dollars ($499 million) higher per month in FY21 compared to the same
period of previous year.
Earlier, Pakistan had received remittances in the range of $1.78-1.9 billion per month in the prior five months -
JanuaryMay 2020, according to the central bank.
The SBP said in its annual report that the government had taken a number of initiatives to ramp up remittances
through official channels and crack down on the illegal Hundi/ Hawala operators.
The initiatives included “extension in the scheme for reimbursement of TT (telegraphic transfer) charges to small
remitters by reducing the transaction threshold from $200 to $100, broadening scope of the incentive scheme for
financial institutions and taking a large number of technology-based money transfer companies on board.”
Country-wise remittances Pakistanis sent 25% higher remittances from Saudi Arabia, which stood at $615.1 million
in November 2020 compared to $490.8 million in the same month of last year. Non-resident Pakistanis dispatched
13% higher remittances at $519.5 million from the UAE in the month under review compared to $459.8 million in
the corresponding month of previous year.
They sent $286.3 million from the United Kingdom, a growth of 46% compared to $196.6 million remitted in
November 2019. Remittances from the US rose 42% to $185.2 million last month compared to $130.9 million in the
corresponding period of previous year.
Overseas Pakistanis remitted $281.4 million from other Gulf Cooperation Council (GCC) counties compared to
$242.9 million last year. Pakistanis living in EU countries sent $219.3 million compared to $141.2 million last year.
They sent $231.7 million from other countries including Malaysia, Norway, Switzerland, Australia, Canada and
Japan in November compared to $159.2 million in November 2019.

Rupee strengthens against dollar

The rupee strengthened against the US dollar at Rs160.13 in the inter-bank market on Friday compared with
Thursday’s close of Rs160.28, according to the State Bank of Pakistan (SBP). Earlier, the SBP let the rupee
depreciate massively in the inter-bank market after finalisation of an agreement with the International Monetary
Fund (IMF) for a loan programme on May 12, 2019. The IMF has asked Pakistan to end state control of the rupee
and let the currency move freely to find its equilibrium against the US dollar and other major world currencies. Also,
the World Bank, which finances some of the infrastructure and social safety net projects in Pakistan, has supported
the idea of leaving the rupee free from state control in a bid to give much-needed boost to exports and fix a faltering
economy. 

Large-scale manufacturing grew by 5.46% during July to October: Asad

Umar
Federal Minister for Planning and Development Asad Umar on Tuesday said the country's large-scale manufacturing
grew to 5.46pc during the period of July to October 2020.
The minister added that the growth recorded during the month of October was "even higher at 6.66pc" versus
October 2019.
"Industrial growth accelerates as economic recover gathers paces."
Hammad Azhar, the minister for industries and production, said that at a time when the global economy is facing a
period of a deep recession, "industry is driving economic growth and recovery in Pakistan".
Earlier in September, it was reported that the country's economy may grow at a pace of 2pc in the current fiscal year.
The Asian Development Bank (ADB), in a report, had stated that growth is forecast to "recover in fiscal year 2020-
21 as economic sentiment improves with the expected subsiding of Covid-19 and the resumption of structural
reform".
The ADB’s projections are in contrast to the government’s claim that Pakistan’s economy is recovering at the fastest
pace in the region.
In the last fiscal year, Pakistan’s economy contracted 0.4pc compared with 20.5pc contraction in the Maldives and
9pc contraction in India. The ADB’s 2pc economic growth projection is in line with Pakistan’s growth target of
2.1pc.
The ADB said its forecast of 2pc gross domestic product (GDP) growth assumes that Covid-19 impact will subside
by the end of 2020.
The regional lender had also noted that agriculture is expected to continue to lend impetus to GDP growth. Growth
in industry is forecast to improve in FY21, led predominantly by construction and small-scale manufacturing.
Spurred by improved growth in agriculture and industry, coupled with an expected improvement in domestic
demand overall, services should also contribute to growth in the current fiscal year, according to the report by ADB.

Tweets
Industrial growth accelerates as economic recovery gathers pace. Large scale manufacturing grew by
5.46% in July to October 2020 vs same period last year. Growth in October was even higher at 6.66% vs
October last year.

Large Scale Manufacturing grew by 5.46% in Jul-Oct period. At a time when the global economy is in a
deep recession, Industry is driving economic growth and recovery in Pakistan.

Tasdasd