Pakistan’s economy has declined due to the decline in remittances from workers | Business and Financial Issues

The sharp decline in foreign workers’ remittances reflects a strain on the economy as Islamabad seeks to bail out the IMF.

Remittances sent home by Pakistanis working abroad will drop to $27bn in 2023, compared to $31.3bn last year, the central bank said on Monday.

Export for June fell to $2.2bn from $2.8bn a year ago, central bank data showed. Remittances mainly came from Saudi Arabia ($515.1m), the United Kingdom ($343m), the United Arab Emirates ($324.7m) and the United States ($272.3m).

According to the World Bank last year, Pakistan was the sixth largest recipient of remittances in the world in 2022, behind India, Mexico, China, the Philippines and Egypt, although Tonga, Lebanon and Samoa are highly dependent on remittances such as percent. of GDP.

Economic crisis in Pakistan

The decline marks yet another blow to Pakistan’s economy, which has been struggling since independence from Britain in 1947.

Years of poor financial management, a global energy crisis and floods have crippled the economy, prompting a series of bailout calls from the International Monetary Fund (IMF) for Pakistan’s central bank.

The $3bn long-term economic package from the IMF should be approved by its committee on July 12.

Islamabad has revised its budget for 2023-24 and raised its interest rate to 22 percent in recent days in line with IMF targets. The IMF also got Pakistan to raise more than 385 billion dollars ($1.41bn) in new taxes to meet its fiscal reforms.

The changes have added to a 38% year-on-year drop in inflation in May, the highest in Asia.

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