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Pakistan's Record High Remittances Signal Economic Growth

Web DeskJune 8, 2024 02:59 AMbusiness
  • Foreign remittances in Pakistan reach US$27 billion, an 8% increase.
  • Significant surge in remittances from key regions like UAE, UK, and Saudi Arabia.
  • Analysts predict total remittances could exceed US$30 billion for FY 2024.
Pakistan's Record High Remittances Signal Economic GrowthImage Credits: pakistantoday
Foreign remittances in Pakistan have surged to a record US$27 billion, indicating strong economic growth potential for FY 2024. With projections exceeding US$30 billion and favorable factors at play, Pakistan's financial stability looks promising.

Foreign remittances in Pakistan have hit a record high during the first 11 months of the fiscal year 2024, reaching an impressive US$27 billion. This marks an 8% increase from the previous year, showcasing a positive trend in the country's financial inflows.

In May 2024, Pakistan experienced a significant surge in remittances from key regions. The UAE led the way with a remarkable 23% increase, followed by the UK at 17%, Saudi Arabia at 15%, and EU countries at 14%. These numbers have exceeded initial expectations and are indicative of a strong economic performance.

Analysts had initially projected full-year remittances to reach US$28 billion, a target that Pakistan is on track to surpass with the current figure of US$27 billion received in 11MFY24. The International Monetary Fund (IMF) had also forecasted US$28 billion for the fiscal year 2024. With this positive momentum, experts are optimistic that Pakistan could achieve total remittances ranging from US$29.5 to US$30 billion for the fiscal year 2024, representing an 8-10% year-on-year growth.

The surge in remittances can be attributed to both seasonal factors related to Eid and a notable increase in the number of Pakistanis migrating abroad in recent years. Between 2022 and 2023, an average of 850,000 Pakistanis migrated annually, a substantial rise from the previous average of 323,000 per year between 2017 and 2021. Analysts predict that this upward trend in remittances is likely to continue, supported by the stable PKR/USD exchange rate and the potential initiation of a new IMF program. The sustained inflow of remittances is expected to bolster Pakistan's economic stability and growth prospects in the coming months.

The remarkable increase in foreign remittances to Pakistan reflects a positive outlook for the country's economy. With strong growth in financial inflows and promising forecasts for the fiscal year 2024, Pakistan is poised for continued economic development and stability. The consistent support from overseas Pakistanis and favorable external factors bode well for the nation's financial well-being, paving the way for a brighter future ahead.

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