European Union: Fastest Growing Source of Remittances to Pakistan
Remittances from the European Union (EU) to Pakistan soared 49.7% in FY 21 and 28.3% in FY22, according to the State Bank of Pakistan. With $2.5 billion remittances in the first 9 months (July-March) of the current fiscal year, the EU ($2.5 billion) has now surpassed North America ($2.2 billion) to become the third largest source of inflows to Pakistan after the Middle East and the United Kingdom. Remittances from the US have grown 21%, second fastest after the EU (28.3%) in the first 9 months of the current fiscal year.
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| Country-wise Remittance Inflows in Pakistan. Source: State Bank of Pakistan |
Pakistanis in European Union:
The population of Pakistan-born migrants to European Union countries has been growing in recent years. With over 120,000 Pakistani migrants, Italy is the most popular destination for Pakistanis in the EU.
Italy is followed by Germany with 75,495 Pakistani migrants. Then comes Spain with 61,953 migrants, France 21,900 (2017), Sweden 11,674, Denmark 10,669, Ireland 7,351 (2016), Belgium 5,927, Portugal 5,310, Norway 5,157, Netherlands 4,723 and Austria 4,112. There are smaller populations of Pakistanis in several other European countries.
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| Pakistan-born Migrants in European Union. Source: OECD |
With $5.74 billion in the first 9 months of current fiscal year FY22, Saudi Arabia remains the top source of remittances to Pakistan, followed by $4.28 billion from the United Arab Emirates (UAE). However, the Saudi remittances are essentially flat while those from the UAE have declined 5.3% in this period. Pakistani diaspora is sending home over $30 billion a year, about 10% of the country's GDP. It is badly needed foreign exchange to balance Pakistan's external accounts.
Pakistan's Worldwide Diaspora:
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| Pakistan Demographics |
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| Projected Population Decline in Emerging Economies. Source: Nikkei Asia |
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Comments
SBP
@StateBank_Pak
Remittances crossed the monthly mark of US $3 billion for the first time. Cumulatively, at $26.1 billion, remittances grew by 7.6 % in the ten months of FY22 compared to last year.
https://www.sbp.org.pk/ecodata/Homeremit.pdf
https://twitter.com/StateBank_Pak/status/1525003527818469378?s=20&t=mxMP2xDzZxS6JamTtFHE0g
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Arif Habib Limited
@ArifHabibLtd
Monthly remittances reach highest ever during Apr’22, up by 12% YoY
Apr’22: $ 3.13bn, +12% YoY | +11% MoM
10MFY22: $ 26.08bn, +8% YoY
https://twitter.com/ArifHabibLtd/status/1525007593323765760?s=20&t=F8npzRfgFy_5U14SHx-WRw
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KARACHI, Pakistan : Remittances from Pakistani workers employed abroad exceeded a record $3 billion in April, the central bank said on Friday as the country’s foreign reserves dwindled to $16.37 million due to external debt payments.
https://www.channelnewsasia.com/business/pakistans-remittances-hit-all-time-monthly-high-3-billion-april-2683406
“Remittances in April (were) $3.1 billion..., crossing $3 billion for the first time ever,” the State Bank of Pakistan said in a statement.
The surge in remittances have been critical in restraining rises in the current account deficit though it has swelled to $13.1 billion in the first nine months of fiscal year 2022.
In terms of growth, remittances in April increased by 11.2 per cent on a month-on-month basis and 11.9 per cent year-on-year.
Cumulatively, at $26.1 billion, remittances grew by 7.6 per cent during the first 10 months of fiscal year 2022, compared with the 2021 fiscal period, the central bank statement said.
Pakistan is in dire need of external financial support due to a widening current account deficit with foreign reserves down to $10.37 million held by the central bank as of May 6 - equivalent to less than two months of imports.
Another $6.06 million in foreign reserves was held by commercial banks as of last week.
Prime Minister Shahbaz Sharif took over last month after a parliamentary no-confidence vote ousted his predecessor Imran Khan, who was blamed for mishandling the economy.
Sharif's government, however, has yet to implement reform policies such as curtailing costly energy subsidies, which were introduced by Khan's government in his last days in power as he faced mounting pressure over soaring inflation.
Remittances came mainly from Saudi Arabia with $707 million, the United Arab Emirates with $614 million, Britain with $484 million and the United States with $346 million, the central bank said, citing cumulative figures.
@afkhwaja
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3h
This is the total dollar inflow in Pakistan over the past 5 years. Look how less important IMF/US/China/Saudi are compared to inflows from overseas Pakistanis. If only we gave them this much importance !
https://twitter.com/afkhwaja/status/1525107929397047297?s=20&t=mxMP2xDzZxS6JamTtFHE0g
FY17-22E
Remittances: $145 billion
Saudi Arabian Support $10 billion
IMF $4.5 billion
China $4.3 billion
US FDI $805 million
Pakistan has the 6th largest diaspora in the world, with 8-10 million people living or settled outside Pakistan. As per the Ministry of Overseas Pakistanis and HRD report 2017, an estimated 8.8 million Pakistanis live abroad or outside Pakistan.
According to the Ministry of Overseas Pakistanis and Human Resource Development, approximately 2 million Pakistanis live in Europe according to December 2017 estimates, with the vast majority, over 1.5 million, residing in the United Kingdom. Italy, Germany, Spain, and France are other countries in Europe with sizeable Pakistani populations.
As per the estimates, the Pakistani Population in European Union in 2022 is 0.5 million.
Source: Ministry of Overseas Pakistanis and HRD report 2017
https://www.findeasy.in/pakistani-population-in-european-union/
# EU Country Overseas Pakistani population
1 Germany 124,000
2 Italy 122,884
3 France 104,000
4 Spain 91,632
5 Norway 39,257
6 Greece 34,177
7 Denmark 25,661
8 Sweden 24,631
9 Netherlands 23,855
10 Belgium 19,247
Apr’22: $ 2.2bn, +94% YoY, +19% MoM
10MFY22: $ 17.0bn, +96% YoY
https://twitter.com/arifhabibltd/status/1525883734138003457?s=21&t=mKZ4thMugbEOJifLndhg1A
Workers’ remittances up 7.7pc to $26.1bn in 10 months
https://profit.pakistantoday.com.pk/2022/05/13/workers-remittances-up-7-7-to-26-1bn-in-10-months/
Exports grow by 25.46pc to $26.228 billion in 10 months
https://www.app.com.pk/business/exports-grow-by-25-46pc-to-26-228-billion-in-10-months/
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Arif Habib Limited
@ArifHabibLtd
Trade deficit increased by 65% to USD 39.3bn during 10MFY22
Textile Exports: $ 16.0bn, +26% YoY
Petroleum Imports: $ 17.0bn, +96% YoY
Agriculture and others: $ 12.1bn, +67% YoY
Transport Imports: $ 3.7bn, +60% YoY
https://twitter.com/ArifHabibLtd/status/1525873729749798913?s=20&t=Ssqo_-kw9_792ptmvNU1kw
@StateBank_Pak
Current Account Deficit shrunk to $623mn, in Apr 22; only two-thirds of Mar22 deficit of $1015mn. A rise in workers’ remittances (by $315mn) & a fall in imports (by $246mn) explain this reduction. Cumulatively, CAD reached $13,779mn during Jul-Apr FY22.
https://www.sbp.org.pk/ecodata/Balancepayment_BPM6.pdf
https://twitter.com/StateBank_Pak/status/1527350717580660743?s=20&t=LvT-wTgMp-e2I1iGiymefw
https://www.worldbank.org/en/news/press-release/2022/05/11/remittances-to-reach-630-billion-in-2022-with-record-flows-into-ukraine
https://www.knomad.org/publication/migration-and-development-brief-36
Remittances to South Asia grew 6.9 percent to $157 billion in 2021. Though large numbers of South Asian migrants returned to home countries as the pandemic broke out in early 2020, the availability of vaccines and opening of Gulf Cooperation Council economies enabled a gradual return to host countries in 2021, supporting larger remittance flows. Better economic performance in the United States was also a major contributor to the growth in 2021. Remittance flows to India and Pakistan grew by 8 percent and 20 percent, respectively. In 2022, growth in remittance inflows is expected to slow to 4.4 percent. Remittances are the dominant source of foreign exchange for the region, with receipts more than three times the level of FDI in 2021. South Asia has the lowest average remittance cost of any world region at 4.3 percent, though this is still higher than the SDG target of 3 percent.
during March, 2022 for overseas employment in different countries.
https://www.finance.gov.pk/economic/economic_update_April_2022.pdf
Social Sector
− PPAF through its 24 Partner Organizations has disbursed 44,386 interest free
loans amounting to Rs 2.0 billion during the month of March 2022. Since inception
of interest free loan component, a total of 1,805,297 interest free loans amounting
to Rs 64.9 billion have been disbursed to the borrowers.
− Bureau of Emigration and Overseas Employment has registered 88,353 emigrants
during March, 2022 for overseas employment in different countries.
− Under Kamyab Jawan Youth Entrepreneurship Scheme (PMKJ-YES) the amount
disbursed stands at Rs 36,846 million till February 2022 to the youth for
businesses
− Covid-19 pandemic has been successfully contained by the government with its
mass vaccination drive. The NCOC is dissolved keeping in view the persistently
falling positivity rate.
− The Ministry of FE&PT and Malala Fund signed a Letter of Understanding (LoU) to
work together on promotion of STEAM in girls high schools.
− Federal Board of Intermediate and Secondary Education (FBISE) has partnered
with the Easy-Paisa for facilitating students for digital fee-payments
https://arynews.tv/pakistan-receives-record-remittances-from-european-countries/
According to details, overseas Pakistanis residing in the EU countries sent over $2.8 billion in remittances in the first 10 months (July-April) of the fiscal year 2021-22. The amount received in these 10 months is 27.1% higher than the amount received at the same time last year. the remittances received by Paksitan at the same time last year were $2.20 billion.
The highest number of overseas Pakistanis in Europe are in Italy and that shows in the number of remittances as well. Overseas Pakistanis in Italy sent $701 million in remittances from July 2021 to April 2022. The amount is 47% higher than the amount sent by Italian Pakistanis last year which was $295.5 million.
According to details, the second-highest remittances, $300 million, were sent from Greece. There was a 41 per cent hike in the remittances sent from Greece in comparison to the last fiscal year. Remittances received from Greece last year amounted to $215 million.
The third highest remittances among European countries were sent from Holland, with an amount of $50.2 million received from July 2021 to April 2022, which is 30% higher than the last year.
While the fourth-highest remittances among EU countries were sent from Spain, with an amount of $42 million which is 30.1% higher than last year.
https://thefintechtimes.com/remittances-are-a-lifeline-for-developing-countries-with-economic-instability/
Remittances sent worldwide have increased 64.3 per cent in the past decade, rising from $420.1billion 10 years’ ago to $653.4billion in the last year, shows research by ACE Money Transfer, the online remittance provider.
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Global economic growth is expected to slump from 6.1 per cent last year to 3.2 per cent this year — significantly lower than the 4.1 per cent anticipated in January. This is due to rising interest rates and spiralling inflation. This slowdown in growth is expected to hit low-income countries harder.
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Remittances also play a key role in urban areas, helping drive investment into real estate and infrastructure in developing countries.
Rashid Ashraf, CEO of ACE Money Transfer, says, “Remittances have a massive impact on people’s lives across the world. When times are tough and economies are struggling, this is when remittances are particularly important.
“Around three-quarters of remittances sent globally are used to cover essential things, like putting food on the family’s table and covering medical expenses, school fees or housing expenses. In addition, in times of crises, migrant workers tend to send more money home to cover loss of crops or family emergencies.”
Countries facing significant economic stress at present include Sri Lanka, Pakistan, Nigeria and Nepal. Remittances play a key role in supporting the economies of all mentioned countries.
Remittances key to helping Sri Lanka and Nepal’s struggling economies
Sri Lanka in particular has struggled following the pandemic, with its economy having collapsed. The country has been short of cash to pay for vital food and fuel imports and has defaulted on its debt.
Remittances are a key pillar of Sri Lanka’s economy, reaching $7.1billion in the past year, up from $6.7billion the previous year. Remittances in Sri Lanka support economic growth, reduce the burden on social security payments and help alleviate poverty. Increases in remittances could significantly aid Sri Lanka’s economic recovery.
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How remittances can help moderate inflation in Pakistan and Nigeria
Pakistan and Nigeria are two other countries facing economic difficulties where remittances can play a key role in their recoveries. Both countries have been struggling with the effects of surging inflation this year.
Pakistan’s currency has devalued 28 per cent compared to the US dollar so far this year, fuelling surges in the prices of vital imported goods such as fuel, cooking oil and grains.
This has made remittances to Pakistan, which have risen 26 per cent to a record $33billion in the past year, even more important. Remittances are a key source of foreign currency for Pakistan and play a significant role in supporting its currency. This is in turn can help control inflation and the price of essential goods and services in the country.
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The role of remittances in strengthening resilient economies like the Philippines
Remittances can also play an important role in countries where the economy has remained resilient. This includes the Philippines’ economy, which has continued to show rapid expansion this year despite global headwinds.
An important stabilising factor in its economy has been remittances, which have reached a record high of $34.9billion in the past year. Remittances in the Philippines are important in supporting domestic consumer spending, which has driven the country’s economic growth.
Remittances are a crucial source of foreign capital for many developing countries. Unlike other flows of private capital, remittances have remained resilient throughout the pandemic. As economics across the world continue to recover, remittances continue to play a vital role in helping countries build resilience and drive economic growth.
https://www.euronews.com/travel/2022/09/06/skilled-workers-are-in-demand-as-germany-tackles-labour-shortage-with-new-points-based-vis
The ‘chancenkarte’ will use a points system to enable workers with required skills to come to Germany more easily.
It is part of a strategy proposed by Labour Minister Hubertus Heil to address the country’s labour shortages, which is due to be presented to the government this autumn.
Every year, quotas will be set depending on which industries need workers. Three out of four of the following criteria must also be met to apply for the scheme:
A degree or vocational training recognised by Germany
Three years’ professional experience
Language skills or a previous stay in Germany
Under 35 years old
Currently, most non-EU citizens need to have a job offer before they can relocate to Germany. A visa for job seekers already exists, but the 'chancenkarte' is expected to make it easier and faster for people looking to find work in Germany.
Citizens of certain countries with visa agreements can already enter Germany for 90 days visa-free but are only permitted to take up short-term employment.
The opportunity card will allow people to come and look for a job or apprenticeship while in the country rather than applying from abroad. Applicants must be able to prove they can afford to pay their living expenses in the mean time.
The exact details of the scheme are yet to be formalised.
Why does Germany need to attract skilled workers?
This year, the shortage of skilled workers in Germany has risen to an all time high. Earlier this year, the Institute for Employment Research (IAB) found 1.74 million vacant positions throughout the country.
In July, staff shortages affected almost half of all companies surveyed by Munich-based research institute IFO, forcing them to slow down their operations.
https://beoe.gov.pk/?__cf_chl_jschl_tk__=b1b4890b1c9705af3b244646c1cd140ad59f0f8a-1577426531-0-Aa7RUMV3c8t-qhTE_wsuXG88GqpOS3SMabeKgwCnn8PO1ZJYBDvkMO4w6yBOsrXLO6HMNxdolaCf201abOoKQn8NU4gXnLVBmFUbaSSfa4KACGuXEphZ-Wpph8DHxEtVFtH_nr3GpKtP5CCKSEDnMfnNes7Xq-dXpcOlCoO6icVLUUltg12JbgVKSxVgUZ7CtIDNT7WC6AqKIYyGIhk-uLlsnW0VYaWhYjeRDqqTPExfqB_E1oGyko049nDUaiNxQL7JRYlKIkcGUVzYTraqiok
Overseas migration of Pakistanis is also diversifying, with an increasing number of migrants going to America and Europe. This is reflected in remittance sources. EU countries are now the fastest growing source of remittances to Pakistan.
https://www.riazhaq.com/2022/05/european-union-fastest-growing-source.html
The data shows that a lot more of the migrants are now skilled labor while the share of unskilled migrants is declining.
Here's an ILO report excerpt:
"Pakistani migrant workers were skilled
(42%) and involved in semi-skilled jobs such as welders, secretaries, masons, carpenters, plumbers and so
on. Another proportion of the labour migration was composed of unskilled labourers (39%) such as
agriculturists, labourers or farmers. Projections about future trends indicate that the number of Pakistani
labour migrants will continue rising to reach 15.5 million in 2020 (Government of Pakistan, 2018"
https://migration.iom.int/sites/g/files/tmzbdl1461/files/reports/Pakistan%20Migration%20Snapshot%20Final.pdf
"While migration to Pakistan has a strong cross-border dimension, the main destination countries of the large Pakistani diaspora are scattered across the world. In 2017, 22 per cent of the 6 million Pakistani emigrants lived in Saudi Arabia, 18 per cent in India, 16 per cent in the United Arab Emirates, 15 per cent in Europe and 6 per cent in the United States of America (Figure 3)"
https://migration.iom.int/sites/g/files/tmzbdl1461/files/reports/Pakistan%20Migration%20Snapshot%20Final.pdf
According to the 2020 International Migrant Stock compiled by UNDESA4, a total of 952,993 Pakistani nationals resided in Europe in 2020. Fifty-eight per cent of them were male and forty-two percent were female. The number of Pakistani nationals in each European country in 2020 is shown in Annex 1, together with gender-disaggregated numbers. UNDESA estimates the number and composition of migrants on the basis of data obtained from population censuses, population registers and national surveys. The dataset provides estimates of the international migrant stock by age, sex and origin for the mid-point (1 July) of each year: 1990, 1995, 2000, 2005, 2010, 2015 and 2020.
https://migration.iom.int/sites/g/files/tmzbdl1461/files/reports/PAK_2021_Migrant%20Presence_Europe.pdf
European Countries Total Migrants Male Female
Denmark 14,318 7,503 6,815
Estonia 261 195 66
Finland 3,134 2,090 1,044
Iceland 94 69 25
Ireland 10,570 6,667 3,903
Latvia 228 204 24
Lithuania 7 3 4
Norway 21,140 10,853 10,287
Sweden 16,597 9,891 6,706
United Kingdom 537,047 282,645 254,402
Greece 8,823 4,435 4,388
Italy 124,800 89,557 35,243
Malta 549 300 249
Portugal 2,217 1,469 748
Slovenia 42 31 11
Spain 63,819 41,074 22,745
Austria 6,097 4,076 2,021
Belgium 13,246 8,143 5,103
France 27,203 16,341 10,862
Germany 79,227 53,993 25,234
Liechtenstein 7 5 2
Luxembourg 279 169 110
Switzerland 5,381 3,304 2,077
The Netherlands 14,104 8,030 6,074
Bulgaria 290 182 108
Hungary 1,055 780 275
Poland 278 257 21
Romania 625 438 187
Russia 726 579 147
Slovakia 122 110 12
The Czech Republic 662 501 161
https://beoe.gov.pk/?__cf_chl_jschl_tk__=b1b4890b1c9705af3b244646c1cd140ad59f0f8a-1577426531-0-Aa7RUMV3c8t-qhTE_wsuXG88GqpOS3SMabeKgwCnn8PO1ZJYBDvkMO4w6yBOsrXLO6HMNxdolaCf201abOoKQn8NU4gXnLVBmFUbaSSfa4KACGuXEphZ-Wpph8DHxEtVFtH_nr3GpKtP5CCKSEDnMfnNes7Xq-dXpcOlCoO6icVLUUltg12JbgVKSxVgUZ7CtIDNT7WC6AqKIYyGIhk-uLlsnW0VYaWhYjeRDqqTPExfqB_E1oGyko049nDUaiNxQL7JRYlKIkcGUVzYTraqiok
Since inception of the Bureau in the year 1971, more than 10 million emigrants have been provided overseas employment duly registered with the Bureau of Emigration & Overseas Employment. During the year 2015, highest number of Pakistanis(946,571) proceeded abroad for the purpose of employment. During the year 2022 (December), 832,339 Pakistanis proceeded abroad for the purpose of employment.
https://propakistani.pk/2023/05/18/uk-adds-226-new-visa-categories-to-urgently-hire-skilled-workers/
Exciting opportunities have emerged for Pakistani youth seeking employment abroad as the United Kingdom opens its doors to skilled workers from around the world, including Pakistan.
In response to the severe manpower shortage currently faced by Britain, the country has introduced a significant expansion in its immigration policies.
According to official reports, a total of 226 new immigration categories have been established, accompanied by a noteworthy increase in the minimum wage across all job categories.
This development marks the first time that professions such as police officers, journalists, judges, secret officers, barristers, lawyers, and flight pilots have been included in the immigration category. Furthermore, an additional 31 categories have been designated, encompassing diverse fields such as musicians, dancers, doctors, actors, and scientists.
The expanded opportunities extend beyond specific professions, as drivers, instructors, railway station assistants, air hostesses, cabin crew, veterinary doctors, and tailors are now eligible to pursue employment in the UK. Moreover, individuals with expertise in areas such as masonry, aircraft engineering, AC/fridge engineering, welding, charity work, and estate agency will also find potential avenues for relocation.
Students pursuing education in the UK can now benefit from the post-study work facility, which allows them to gain valuable work experience following the completion of their studies. Notably, highly-educated professionals can anticipate a substantial 20 percent increase in their remuneration, as highlighted in the official letter.
To facilitate the approved manpower shortage category, the UK government has taken steps to keep visa fees at a reasonable level, ensuring accessibility for individuals seeking employment opportunities in the country.
These progressive changes in the UK’s immigration policies provide an encouraging prospect for skilled workers from Pakistan and around the world. The reduced visa fees and the inclusion of a diverse range of professions reflect the British government’s commitment to addressing the pressing shortage of manpower while simultaneously welcoming talented individuals to contribute to the country’s workforce.
Aspiring professionals from Pakistan are encouraged to explore these newfound possibilities, which not only promise career growth but also cultural exchange and personal development. The opportunities available in the UK cater to a wide spectrum of skills and talents, fostering an environment where individuals can thrive and make significant contributions to their chosen fields.
With these favorable policy revisions, Pakistanis can now embark on a transformative journey, utilizing their expertise to build successful careers and establish meaningful connections in the United Kingdom.
Pakistanis
People 61,915
Male 37,720
Female 24,195
Australian citizen 42.3%
Not an Australian citizen 56.0%
https://www.abs.gov.au/census/find-census-data/quickstats/2016/7106_0
Indians
People 455,388
Male 245,416
Female 209,972
Australian citizen 48.1%
Not an Australian citizen 50.8%
https://www.abs.gov.au/census/find-census-data/quickstats/2016/7103_0