European Union: Fastest Growing Source of Remittances to Pakistan

[Riaz Haq]

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. 

Country-wise Remittance Inflows in Pakistan. Source: State Bank of ...

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. 

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.  

Pakistanis in Italy. Source: Italian Government

Pakistan's Worldwide Diaspora:

Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020,  more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade.  

 

Pakistan’s economy created 5.5 million domestic jobs during the past three years –on an average 1.84 million jobs a year, which is far higher than yearly average of creation of new jobs during the 2008-18 decade, according to the Labor Force Survey (LFS) published by the Pakistan Bureau of Statistics (PBS). 

Worker Remittances as Percentage of Pakistan GDP. Source: World Bank

Pakistan ranks 6th among the top worker remittance recipient countries in the world.  India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.  

 

Pakistan Demographics

Pakistan's Demographic Dividend: 

About two million Pakistanis are entering the workforce every year. The share of the working age population in Pakistan is increasing while the birth rate is declining. This phenomenon, known as demographic dividend, is coinciding with declines in working age populations in developed countries. It is creating an opportunity for over half a million Pakistani workers to migrate and work overseas, and send home record remittances. These overseas Pakistanis are now 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.  

Projected Population Decline in Emerging Economies. Source: Nikkei ...

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[Riaz Haq]

Ali Farid Khwaja
@afkhwaja
·
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=...


FY17-22E

Remittances: $145 billion

Saudi Arabian Support $10 billion


IMF $4.5 billion


China $4.3 billion

US FDI $805 million

[Riaz Haq]

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&a...

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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&am...

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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-...

“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.

[Riaz Haq]

Pakistani Population in Europe
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

[Riaz Haq]

Pakistanis in EU

https://www.findeasy.in/pakistani-population-in-european-union/

Pakistanis in Germany
Pakistani Diaspora in Germany also referred to as Pakistani Germans are estimated at 124,000 (1.25 lakh). The number is based on the Dec. 2017 report on Overseas Pakistani by the Ministry of Overseas Pakistanis and Human Resource Development.

Almost a third of all Pakistanis in Germany live in Hesse. There are approximately 1900 Pakistanis living in the northern city-state of Hamburg, about 1500 in Frankfurt am Main and almost 1400 in Berlin and its suburbs. Many young Pakistanis have come to Germany recently as students of science and technology in prestigious universities.

Pakistanis in Italy
Pakistani Diaspora in Italy is estimated at 122,884 (1.25 lakh). The number is based on the Dec. 2017 report on Overseas Pakistani by the Ministry of Overseas Pakistanis and Human Resource Development.

Most of the workers are of Punjabi background and account for 72 percent share of migrants in 2016 and 76 percent in 2017. According to the Italian ambassador to Pakistan, Andreas Ferrarese, as of February 2021, there are around 200,000 Pakistanis in Italy, of the 140,000 are documented.

Pakistanis in France
Pakistani Diaspora in France is estimated at 104,000 (1.04 lakh). The number is based on the Dec. 2017 report on Overseas Pakistani by the Ministry of Overseas Pakistanis and Human Resource Development.

There is a population of Pakistanis in France, primarily of Punjabi origin from Punjab and Azad Kashmir. Large-scale Pakistani migration to France began in the 1970s; they clustered around the Rue du Faubourg-Saint-Denis in the 10th arrondissement of Paris, where many set up grocery stores and restaurants.



According to the latest official statistics published by the French government, there were 24,305 Pakistani-born people living in the country in the year 2015, also there were 19,646 Pakistani nationals living in France in 2015

Pakistanis in Spain
Pakistani Diaspora in Spain is estimated at 34,177. The number is based on the Dec. 2017 report on Overseas Pakistani by the Ministry of Overseas Pakistanis and Human Resource Development.

Spain has a population of approximately 46.5 million, of which 9.5% are foreigners. Pakistanis are 1.2% of all foreigners and barely 0.1% of the population in Spain and more than half of all Pakistanis in Spain are in Barcelona.

Pakistanis in Norway
Pakistani Diaspora in Norway is estimated at 39,257. The number is based on the Dec. 2017 report on Overseas Pakistani by the Ministry of Overseas Pakistanis and Human Resource Development.

Around half of the Pakistani population in Norway are Punjabis and 65.23% of Pakistanis in Norway live in the capital Oslo. The earliest Pakistani migrants came to Norway in the 1960s and 1970s as migrant workers, a large portion from Punjab.



Pakistanis in Greece
Pakistani Diaspora in Greece is estimated at 39,257. The number is based on the Dec. 2017 report on Overseas Pakistani by the Ministry of Overseas Pakistanis and Human Resource Development.

According to official figures, some 700,000 legal immigrants make up 6.5 percent of Greece’s population. The size of the Pakistani community, one of the largest, is estimated to be about 80,000-strong; only 30,000 of them are in Greece legally.



Pakistanis in Denmark
Pakistani Diaspora in Denmark is estimated at 25,661. The number is based on the Dec. 2017 report on Overseas Pakistani by the Ministry of Overseas Pakistanis and Human Resource Development.

The earliest Pakistani migrants came to Denmark in the 1960s and 1970s as migrant workers, a large portion from Punjab. Danish Pakistanis form the country’s fifth-largest community of migrants and descendants from a non-Western country, with 14,379 migrants and 11,282 locally born people of Pakistani descent as of 1 January 2019 according to the latest figures published by the government of Denmark.

[Riaz Haq]

Highest ever oil import bill for the month of April 2022 amid 72% YoY jump in Arab Light prices along with 28% YoY volumetric growth.

Apr’22: $ 2.2bn, +94% YoY, +19% MoM
10MFY22: $ 17.0bn, +96% YoY

https://twitter.com/arifhabibltd/status/1525883734138003457?s=21&am...

Workers’ remittances up 7.7pc to $26.1bn in 10 months

https://profit.pakistantoday.com.pk/2022/05/13/workers-remittances-...

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-b...
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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&am...

[Riaz Haq]

SBP
@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&a...

[Riaz Haq]

Arif Habib Limited
@ArifHabibLtd
Current Account Balance Apr’22

CAB: $-623mn (+132% YoY, -39% MoM)
Remittances: $3.1bn (+12% YoY, +11% MoM)
Total imports: $7.0bn (+25% YoY, -3% MoM)
Total exports: $3.8bn (+35% YoY, +1% MoM)

https://twitter.com/ArifHabibLtd/status/1527489074482782210?s=20&am...

[Riaz Haq]

Remittances to Reach $630 billion in 2022 with Record Flows into Ukraine

https://www.worldbank.org/en/news/press-release/2022/05/11/remittan...

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.

[Riaz Haq]

Pakistan has received all-time high remittances from overseas Pakistanis residing in European countries in the first 10 months of the fiscal year 2021-22.

https://arynews.tv/pakistan-receives-record-remittances-from-europe...

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.

[Riaz Haq]

Pakistan’s earnings from Italy in exports and remittances crossed $2 billion in Financial Year 2021-2022. In addition a substantial growth in FDI from Italy was also witnessed during the record breaking year.

https://profit.pakistantoday.com.pk/2022/07/20/earnings-from-italy-...

Italy became the seventh billion dollar export country for Pakistan during the year with a record growth of export volume to $1,146 million, while the remittances from Italy were also on the path to touch billion dollars soon with a total of $857 million during the year.
June 2022 also set the record for highest export volume ever to Italy in a single month crossing $144 million.
Italy posted the highest growth both in workers remittances among all countries with high numbers of Pakistani diaspora and for exports among the top ten export destinations.
This phenomenal growth in exports and remittances has come at a time when European economies in general and Italian economy in particular is slowing down and facing multiple challenges due to Ukraine war.
The exports to Italy of $1.15 billion in FY 2021-22 are 46% higher than the previous year, while the remittances are 41% higher for the same period than the last year.
While talking to media, Pakistan`s Ambassador to Italy, Jauhar Saleem paid glowing tributes to the Pakistani exporters for their initiative and hard work and to the Pakistani diaspora in Italy for standing by the country in a most challenging economic environment. He also shared that Pakistan had posted a record trade surplus of $573 million during the financial year 2021-22 which is 91% higher than the previous year.
According to the envoy, the value added sectors were the main drivers of the exceptional export growth with exports of plastic products increasing by 208%, sports goods 80%, leather 42%, home textiles 36% and garments 35%. The ambassador also shared that even as the pandemic hit global footwear market witnessed a contraction of shrank demand during the year, Pakistan’s exports of footwear to Italy increased by 19% in the year and Italy has become the 3rd largest export destination for Pakistani footwear. Italy is also the 5th largest destination for Pakistani home textiles and ranks No.6 in garments exports.
Ambassador Saleem also informed that that with the revival of market activities after removal of pandemic related restrictions in Italy, the Pakistan Embassy in Italy was further pacing up its activities to connect Pakistani businesses with Italian firms to sustain the exports and FDI growth. During the just concluded financial year, Pakistan received Italian investment in the sectors of food processing, chemicals, construction, leather, footwear, energy related equipment and IT.
The Ambassador also shared that some of the recent joint ventures between leading Pakistani and Italian footwear firms were enabling technology transfer, international marketing skills and supply chain management to Pakistani firms. Moreover, Italy was also providing technical support in agriculture sector especially related to olive and olive products. Similarly, Italy is supporting the efforts for reduction of risks of Glacial Lake Outburst Floods (GLOF) and hydrogeological hazards in mountainous areas by establishing an evidence-based assessment and monitoring system for glaciers in Gilgit Baltistan.
Ambassador Jauhar Saleem also informed the media that Italy has announced to allow 69,700 seasonal workers from selected countries in 2022 to come to Italy for work. Pakistan has already been included in the Italian Seasonal Work Visa Programme for 2022, which would offer many opportunities to our workers in agriculture and services sector to work in Italy. He added that Italian government has recently reduced the timelines for work visa processing which has been a long standing demand from Pakistani workers.