BAFL 53.25 Increased By ▲ 0.74 (1.41%)
BIPL 22.45 Decreased By ▼ -0.35 (-1.54%)
BOP 5.63 Decreased By ▼ -0.05 (-0.88%)
CNERGY 5.00 Decreased By ▼ -0.09 (-1.77%)
DFML 19.09 Decreased By ▼ -0.26 (-1.34%)
DGKC 79.50 Decreased By ▼ -1.30 (-1.61%)
FABL 33.00 Decreased By ▼ -0.10 (-0.3%)
FCCL 19.84 Decreased By ▼ -0.39 (-1.93%)
FFL 10.43 Decreased By ▼ -0.14 (-1.32%)
GGL 13.54 Decreased By ▼ -0.08 (-0.59%)
HBL 125.45 Decreased By ▼ -4.72 (-3.63%)
HUBC 119.84 Decreased By ▼ -2.78 (-2.27%)
HUMNL 7.95 Decreased By ▼ -0.10 (-1.24%)
KEL 4.63 Increased By ▲ 0.18 (4.04%)
LOTCHEM 27.90 Decreased By ▼ -0.02 (-0.07%)
MLCF 41.89 Decreased By ▼ -0.81 (-1.9%)
OGDC 123.60 Decreased By ▼ -2.01 (-1.6%)
PAEL 22.05 Increased By ▲ 0.70 (3.28%)
PIBTL 6.22 Increased By ▲ 0.10 (1.63%)
PIOC 117.06 Decreased By ▼ -0.94 (-0.8%)
PPL 112.70 Decreased By ▼ -1.15 (-1.01%)
PRL 30.25 Decreased By ▼ -1.55 (-4.87%)
SILK 1.18 Increased By ▲ 0.08 (7.27%)
SNGP 68.95 Decreased By ▼ -0.45 (-0.65%)
SSGC 13.54 Decreased By ▼ -0.18 (-1.31%)
TELE 9.64 Increased By ▲ 0.40 (4.33%)
TPLP 15.22 Increased By ▲ 0.47 (3.19%)
TRG 94.01 Increased By ▲ 1.16 (1.25%)
UNITY 27.43 Decreased By ▼ -0.07 (-0.25%)
WTL 1.73 Increased By ▲ 0.07 (4.22%)
BR100 6,779 Decreased By -36.4 (-0.53%)
BR30 23,929 Decreased By -315.9 (-1.3%)
KSE100 65,948 Decreased By -275.8 (-0.42%)
KSE30 22,036 Decreased By -87.3 (-0.39%)

ISLAMABAD: The World Bank has projected a slowdown in remittances to Pakistan and estimated it to grow at eight percent to $34 billion in 2022 compared to $31 billion in 2021 which grew at 20 percent.

The bank in its latest report, “Migration and Development Brief, A War in a Pandemic Implications of the Ukraine crisis and COVID-19 on global governance of migration and remittance flows”, stated that the remittance outlook for South Asia in 2023 is highly uncertain. While high-frequency data for all countries except India show growth in remittances slowing in South Asia, it is unlikely that the strong growth in remittances in South Asia in 2020 and 2021 can be sustained through 2023.

In India, remittances are projected to grow 5 percent in 2023 and in Pakistan and Bangladesh, by 8 percent and 2 percent, respectively, while for Afghanistan, remittance flows will remain flat. In Bhutan, Maldives, Nepal, and Sri Lanka, remittance growth in 2023 is anticipated to maintain 2022 rates.

The report noted that South Asia enjoyed a seven percent gain in remittances to $157 billion in 2021, outstripping the strong performance and show of resilience during the 2020 worldwide economic downturn. Though large numbers of South Asian migrants returned to home countries as the pandemic broke out in early 2020, the availability of vaccines and the opening of GCC economies enabled a gradual return to host countries in 2021, supporting larger remittance flows.

WB projects 23 percent decline in remittances

Outturns were largely supported by India and Pakistan. Remittance flows to the former grew by eight percent in 2021 to $89.4 billion, on recovery in the United States (accounting for a fifth of India’s remittances) and support to families back home affected by the delta variant in the summer of 2021.

The fact that the stock of migrants has increased rapidly in the OECD countries (from around 10 percent of the population in 2000 to around 14 percent by 2018) has led to widespread concerns about large and sudden influxes of migrants. In part, such concerns are fuelled by a 21 percent annual increase in the number of refugees during 2015–18. The recent surge in movements out of Ukraine (5.5 million in two months, an unprecedented rate of exodus since the India-Pakistan refugee movements) has added to this concern.

Relative to 2020, when all but two South Asian countries (Nepal and Afghanistan) enjoyed a spike in remittance inflows, the region’s 2021 experience was fuelled predominantly by inflows to India and Pakistan.

In 2021, the importance of remittances for the national economy (GDP) was paramount for several countries of South Asia. In Nepal, despite the depletion in the stock of migrants sending remittances since 2020 and slow resumption in emigration in 2021, remittance inflows claimed the largest share once again in South Asia, reaching 24 percent of GDP in 2021.

India retained its position as the top recipient of remittances globally, although in comparison to its economy, remittances accounted for only three percent of GDP in 2021. Both India and Nepal are positioned to hold steadfast to their positions in 2022. The significance of remittances ranged from about nine percent for Pakistan to seven percent and more than six percent of GDP for Sri Lanka and Bangladesh in 2021, respectively.

The home country factors shaping remittance inflows in South Asia were country specific in 2021. While domestic monetary and fiscal incentives to attract remittances played an unmistakable role in leading to a spike in formally recorded remittance flows to Pakistan and Bangladesh in 2020, their effects seemed to be one-off. As COVID-19 caseloads declined and South Asia opened for business and travel, its migrants reverted to using informal channels of money transfers.

In 2022, all South Asian countries are already grappling with fuel inflation. Although the region will not be immune to global food price inflation if the Russia-Ukraine war transforms into a longer-term crisis, the larger South Asian countries that produce some of their own food will be partially protected. In Afghanistan, migrants’ families have been displaced in large numbers since the Taliban assumed power in the summer of 2021, and the Sri Lankan economy is in a state of escalating economic turmoil.

Remittance flows to Pakistan increased at an impressive 20 percent in 2021 to $31 billion, while in Bangladesh remittances grew by only 2.2 percent to $22 billion.

Growth in remittances was powered mainly by government incentives, support from migrants to their families back home, and inflows intended for Afghan refugees in Pakistan. High-frequency monthly data has marked a consistent downward trend since September 2021. Formally recorded remittances to Pakistan are likely to grow at eight percent to $34 billion in 2022.

In Bangladesh, except for a 24 percent spike in March 2022 to mark the start of Ramadan, monthly remittance growth has been decreasing over the past 8 months. Remittances are anticipated to gain two percent in 2022, the report added.

Copyright Business Recorder, 2022


Comments are closed.

World Bank projects slowdown in remittances

Intra-day update: rupee inches higher against US dollar

Banks in the red as KSE-100 loses some steam

Sanjrani accepts resignation of Tarin

India’s top court orders elections in Kashmir by Sept 2024

Israel presses ahead with aggression in southern Gaza

Importer booked for evasion of Rs30m duty

‘Country is not getting new inflows from abroad’

Oil extends gains on US strategic reserve purchases

Saudi minister seeks govt’s intervention for resolution of KE issue

LoIs for hydropower projects: KP seeks provinces’ say in PPIB WG