The spike in spending is expected to beef up the Eid economy this year by 5pc to an estimated Rs945 billion from Rs900bn in 2016.
According to the State Bank the disbursement of fresh currency notes through the SBP’s SMS service is expected to be about Rs30bn. “Commercial banks have been provided Rs340bn for disbursement over the counter and ATM’S”
The disbursement of new notes last year dipped for some unexplained reason to Rs161bn from Rs249bn in 2015. Why it shot up drastically to Rs380bn during 2017 was not explained. If even half of this amount is assumed to be spent on Eid, the amount works out to be Rs190bn.
Pakistan received remittances of $1.59bn per month in July-May 2016-17 down from monthly $1.8bn last year. In Ramazan, inflows were expected to increase sharply but were still estimated to be less than last year. Out of expected $3bn inflows as much as 60pc, $1.8bn (Rs190.8bn), could enter the market for Eid shopping.
Currency dealers said they believe such flows are over 75pc of the formal inflows in Ramazan. That translates to $2bn. Much of it ($1.5bn/Rs150bn) covers the citizen’s Eid expenditures.
Pre-Eid cash withdrawals are expected to be about Rs250bn in 2017 compared to Rs225bn last year and Rs200bn in 2015.
Eidi is under 5pc of the Eid budget of a family. If even one forth of 380bn fresh notes (Rs145bn) is assumed to be used as Eidi.
Eid ul Azha expanding in 2016
On last year in 2016, Pakistanis are spending about $3.5 billion on Eid ul Azha, according to analysts. This includes $2.8 billion worth of livestock and another $700 million on clothes, shoes, jewelry and various services. This amount represents a huge transfer of wealth from urban to rural population in the country.
This year, the media reports indicate that 4 million goats, 2.7 million cows, 800,000 lambs and 30,000 camels are being slaughtered in Pakistan on the occasion.
Using a conservative average price of $600 per cow, $200 per goat or lamb and $800 per camel, the total cost of animals adds up to $2.8 billion. Various services offered by, transporters, butchers and slaughter houses are in addition to this amount. The Eid celebration includes buying and wearing new clothes and shoes as well as women's jewelry and other accessories that add up to another $700 million spent in Pakistan.
From the province of Punjab, cattle come from Sahiwal, Bhakkar, Bhawalpur while Sindh has Nawabshah and Mir Pur Khas as the breeding grounds for fine quality cattle. Sibi, also in Sindh is popular for its bullocks which are known for their distinct colour and built.
Transporting these animals from these small cities to city centres and hubs and from there to the customers’ house around the nation boosts the transport business.