|2016 Remittances to South Asia. Source: World Bank|
Meanwhile, global remittance flows to developing countries registered a decline for two successive years, said the report. Remittances declined by an estimated 2.4 percent, to $429 billion, in 2016, after a decline of 1 percent in 2015. India, the largest remittance-receiving country worldwide, led the fall with a decrease of 8.9 percent in remittance inflows.
South Asia Region:
Remittances to India declined by 8.9 percent in 2016, to $62.7 billion, ranking the country as the top recipient of such inflows. In Bangladesh, remittances declined by an estimated 11.1 percent in 2016. In Pakistan, the 12 percent growth witnessed in 2015 moderated to an estimated 2.8 percent in 2016. Nepal experienced unusually high growth in remittances, at 14.3 percent in 2015, due to emigrants sending financial assistance after the earthquake. In 2016, remittance flows to Nepal declined by an estimated 6.7 percent from the previous year’s high level. In Sri Lanka, remittance growth was estimated at 3.9 percent in 2016.
Next Year Forecast:
The World Bank says the remittance growth in the region is projected to remain muted, because of low growth and fiscal consolidation in GCC countries with low energy prices. An increase of only 2.0 percent is expected in 2017. Bangladesh’s remittance growth in 2017 is forecast at 2.4 percent, India’s at 1.9 percent, Pakistan’s at 1.4 percent, and Sri Lanka’s at 1.3 percent.
World Bank report says Pakistani diaspora bucked the 2016 global decline in remittances with a modest 2.8% increase over 2015. An estimated $19.8 billion remitted to Pakistan amounted to 6.9% of the country's GDP. This is a welcome relief coming on the heels of the State Bank of Pakistan report indicating the country's current account deficit widened to $6.13 billion or 2.6% of GDP in the first 9 months of fiscal 2017. Future growth in remittances is likely to remain muted. Slowing growth in such inflows will further increase pressure on Pakistan to work on enhancing exports and attracting more foreign direct investment.
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