Pakistan’s flailing economy hit by drop in worker remittances | Business and Economy News

Pakistan’s flailing economy hit by drop in worker remittances | Business and Economy News
Pakistan’s flailing economy hit by drop in worker remittances | Business and Economy News

A dramatic drop in international employees’ remittances alerts an additional blow to the economic system as Islamabad seeks an IMF bailout.

Remittances despatched dwelling by Pakistanis working overseas fell to $27bn for the fiscal 12 months 2023, in contrast with $31.3bn a 12 months earlier, the nation’s central financial institution mentioned on Monday.

Remittances for June slumped to $2.2bn from $2.8bn a 12 months earlier, central financial institution information confirmed. The remittances have been primarily sourced from Saudi Arabia ($515.1m), the UK ($343m), the United Arab Emirates ($324.7m) and america ($272.3m).

Based on the World Financial institution final 12 months, Pakistan was the world’s sixth high recipient of remittances in 2022, behind India, Mexico, China, the Philippines and Egypt, though Tonga, Lebanon and Samoa are most depending on cash despatched dwelling from overseas as a proportion of GDP.

Pakistan’s financial disaster

The drop alerts one other blow to Pakistan’s economic system which is going through its worst disaster since gaining independence from Britain in 1947.

Years of economic mismanagement, a world power disaster and extreme flooding have battered the economic system, leading to a slew of strict financial measures imposed by the Worldwide Financial Fund (IMF) as Pakistan’s central financial institution appears to safe a bailout.

The $3bn short-term financial package from the IMF is topic to approval by its board on July 12.

Islamabad has revised its 2023-24 finances and raised its benchmark rate of interest to 22 p.c in latest days in step with IMF calls for. The IMF additionally received Pakistan to lift greater than 385 billion rupees ($1.41bn) in new taxation to fulfill their fiscal changes.

The adjustments have fuelled an all-time excessive inflation of 38% year-on-year in Could, the very best in Asia.

Source link