ISLAMABAD: The estimated $87.3 billion worth of foreign inflow during the fiscal year 2021-22 is based on the assumption that the International Monetary Fund (IMF) programme would continue, after derailing again.
On Thursday, Finance Minister Shaukat Tarin chaired a meeting to review the status of foreign inflows needed to service the country’s debt and international payment obligations.
However, the meeting ended inconclusively as statistics related to actual outflow payments against imports, foreign loans, and repatriation of profits were unavailable.
As per the sources, unsatisfied and unhappy, Shaukat Tarin sought more information in the next meeting, the specifically month-wise status of projected foreign inflows and outflows.
The input from the State Bank of Pakistan, Board of Investment, finance ministry, economic affairs ministry and Ministry of Commerce reflect an estimated $87.3 billion during the ongoing FY2021-22.
Around $31.2 billion in remittances have been projected during the ongoing fiscal year, a 7.8 per cent increase over the last fiscal year. SBP informed the finance minister that since the number of new workers going abroad had dropped, a dent in foreign remittances can be expected.
As per sources, Shaukat Tarin gave directives for further studying the reasons behind the $29.3 billion worth of remittances last year, particularly the positive impacts on overseas restriction regulations by Financial Action Task Force (FATF).
It was reported that, for a prize scheme to encourage foreign remittances, approval was sought by the SBP, which the finance minister agreed to.
Sources said that the Ministry of Commerce had estimated a 20.7 per cent higher exports of goods at $31.6 billion than the previous $5.3 billion. Similarly, the export of services is estimated to be 26.2 per cent higher at $8 billion.
The exact figures for imports of goods and services were not shared.
The Monetary Policy Committee (MPC) estimated that out of the external financing requirement for this fiscal year of over $23 billion, $20 billion are expected to be more than fully met.
Furthermore, the MPC noted that to contain the current account deficit in a sustainable range of 2-3% of GDP in the fiscal year 2021-22, market-based flexible exchange rate system, resilience in remittances, improved outlook for exports and appropriate macroeconomic policy can prove to be very helpful.
