In a rare instance of COVID-19 helping a country’ s economy, Pakistan saw a significant uptick in remittances from nationals working overseas in July.
“More good news for Pak economy. Remittances from overseas Pakistanis reached $2,768 mn in July 2020, highest-ever amount in one month in the history of Pakistan. This is 12.2 percent increase over June 2020 and 36.5 percent increase over July 2019,” Pakistan Prime Minister Imran Kahn tweeted early Monday (Aug. 17) EST.
Analysts said workers were able to send the money home in part because COVID-19 prevented them from using it for the Hajj, the pilgrimage Muslims are expected to make at least once in their lifetimes to the holy city of Mecca in Saudi Arabia if their finances and health allow. Many Muslims visit Mecca more than once. The cancellation of many flights overall was also a factor, analysts said.
Pakistan’s central bank issued a news release on Monday (Aug. 17) attributing the increase in reported remittances in part to improvements in the channels used to send them – including a reduction in the threshold for a formal transfer to US $100 from US $200.
The bank also cited “targeted marketing campaigns to promote formal channels for sending remittances” as a factor in the uptick.
The countries from where most of the remittances came during July, according to the State Bank of Pakistan, were Saudi Arabia (US $821.6 million), UAE (US $538.2 million), the United Kingdom (US $393.9 million) and the United States (US $250.6 million).
The increase in remittances to lower-income countries stands in contrast to a decrease in remittances to wealthier countries.
The changes come as the remittances system adapts to digital technologies playing a larger role in the process.