Compared to the overall growth of 8 percent in remittances in South Asia, the remittances into Pakistan grew by 26 percent during the year 2021, according to estimates from the World Bank’s Migration and Development Brief.
“Pakistan had another year of record remittances with growth at 26 percent and levels reaching $33 billion in 2021,” says the report released by WB.
In addition to the common drivers, the government’s ‘Pakistan Remittance Initiative’ to support transmission through formal channels attracted large inflows it says adding the Afghanistan’s fragile situation emerged as an unexpected cause of remittances in 2021 intended for Afghan refugees in Pakistan as well as for families in Afghanistan.
According to the report, overall remittances to South Asia likely grew around 8 percent to $159 billion in 2021.
Higher oil prices aided economic recovery and drove the spike in remittances from the Gulf Cooperation Council (GCC) countries which employ over half of South Asia’s migrants. Economic recovery and stimulus programs in the United States also contributed to the growth.
In India, remittances advanced by an estimated 4.6 percent in 2021 to reach $87 billion, according to the report.
Remittances is the dominant source of foreign exchange for the region, with receipts more than twice as large as FDI in 2021.
On remittance costs the report adds, South Asia had the lowest average costs of any world region at 4.6 percent. But sending money to South Asia through official channels is expensive compared with informal channels which remain popular.
Cost-reducing policies would create a win-win situation welcomed by migrants and South Asian governments alike.The report says, remittances to low- and middle-income countries are projected to have grown a strong 7.3 percent to reach $589 billion in 2021.
This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 percent despite a severe global recession due to COVID-19, according Migration and Development Brief released.—APP
