APD | World Bank sees moderate growth in overseas remittances to Pakistan

By APD writer Muhammad Sohail

ISLAMABAD, Dec. 9 (APD) -- The World Bank has projected that the growth of remittances in Pakistan is projected to remain moderate at 6.2 percent in 2018 due to significant declines in inflow from Saudi Arabia, the largest remittance source for the country, local media reported while quoting a report.

While remittances to South Asia are projected to increase by 13.5 percent in 2018, said a report from the World Bank.

The report said, “Regional Trends in Migration and Remittance Flows” said that the remittances to Pakistan are expected to touch the figure of 20.9 billion US dollars in 2018, which is 6.9 percent of GDP.

India remains on top with the figure of 79.5 billion US dollars.

After slow growth of 2.4 percent in 2016, remittances remained nearly flat in 2017 largely due to significant declines in inflows from Saudi Arabia, and this trend continued into early 2018, the report said.

Bangladesh remained at third position with 15.9 billion followed by Nepal, Sri Lanka, Afghanistan, Bhutan and Maldives. Remittances to South Asia are projected to increase by 13.5 percent in 2018, a faster pace than the 5.7 percent growth seen in 2017.

The upsurge is driven by stronger economic conditions in high-income economies particularly the United States and an increase in oil prices up to Oct 2018, which had positive impact on remittance outflows from some Gulf Cooperation Council (GCC) countries such as the United Arab Emirates, which reported 13 percent growth in outflows in the first half of this calendar year.

According to the World Bank’s Remittance Prices Worldwide Database, the cost of sending money to LMICs remained almost stagnant at 6.9 percent in the third quarter of 2018.

This is more than double the Sustainable Development Goal target of 3 percent by 2030. The cost for South Asia was the lowest, at 5.4 percent, while Sub-Saharan Africa continued to have the highest average cost, at 9 percent.

South Asia had the lowest average remittance costs in any world region - at 5.4 percent - in the third quarter of 2018. But this is somewhat higher than the 5.2 percent costs seen in the previous quarter and a reversal of the steady declines seen since the second quarter of 2017, the report says.

With regard to the migration trends, the report estimates that in Pakistan, the number of workers registered for overseas employment dropped by 41 percent or 0.83 million in 2016 to 0.5 million in 2017.

(ASIA PACIFIC DAILY)