Pakistan has witnessed an increase in remittances — money transferred back home by expats — inflows in recent years, a recent report by Moody’s — America’s biggest business and financial services company — has revealed.
While an increase in remittances is good for any country’s household finances, according to the World Bank (WB), Pakistan is the seventh-largest recipient of remittances globally.
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This inflow reached $21 billion, or 6.8% of the country’s GDP in 2018-19.
During fiscal years 2012-19, remittances grew by 9%. Majority of inflows coming from Gulf Cooperation Council countries added up to make 54% of total remittances in 2019, while the United States (US), the United Kingdom (UK) and Malaysia stood at 16%, 16% and 7%, respectively.
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Such growth benefits Pakistani banks by providing a stable and low-cost deposit base (the deposit that could be used for long-term lending).
Moody’s expects further growth in remittances because of Pakistani authorities’ focus on remittances and digitisation, which will further reduce the cost of repatriating funds.
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