COVID-19 to hit hard Pakistan’s remittance inflows: ADB

The ongoing coronavirus pandemic would hit hard Pakistan’s remittance inflows, said the Asian Development Bank in its latest report on Monday.

“The COVID-19 pandemic is expected to hit remittances hard in Asia and the Pacific. In 2019, 6 of the 10 largest remittance recipients globally were from this region—India, the People’s Republic of China (PRC), the Philippines, Pakistan, Bangladesh, and Vietnam,” said ADB in its report titled COVID-19 Impact on International Migration, Remittances, and Recipient Households in Developing Asia.

Central Asian countries such as Georgia, the Kyrgyz Republic, and Tajikistan, sending a large number of seasonal and long-term migrants mainly to the Russian Federation and Europe, will also be hard-hit, along with some of the major migrant origin countries such as Nepal and the Philippines.

ADB said that Pakistan, a country heavily reliant on remittances could see a decline of 26.8 percent from baseline remittances in 2018 under the worst-case scenario.

Back in July, Pakistan received all-time high over $23 billion home remittances inflows during the last fiscal year (FY20). According to State Bank of Pakistan (SBP), on a cumulative basis, workers' remittances surged to a historic high level of $23.121 billion during FY20 compared to $21.739 billion during FY19, witnessing a growth of some 6.5 percent or $1.3 billion.

Similarly, workers' remittances sent by overseas Pakistanis also posted a significant increase of 51 percent during the last month (June 2020) of FY20. Workers' remittances reached record high level of $2.466 billion in June 2020 compared with $1.636 billion in June 2019.

Globally the remittances could decline by $108.6 billion this year as job losses mount and employers trim payrolls amid a COVID-19 pandemic that has devastated economies.

The countries likely to face more severe effects from the pandemic-induced decline in remittance inflows are the ones where remittance shares to gross domestic product (GDP) and per capita remittances are high i.e. Tonga, Samoa, and other Pacific countries, with remittances relative to the size of their economies and populations very high.