Coronavirus Pandemic And Risks To Remittance Inflows

The on-going global economic slow-down due to the Covid-19 outbreak has raised concerns of substantial fall in remittance flows to the developing countries. Pakistan is one of the world’s top ten recipients of international remittances according to the World Bank. In 2019, the country received US $21.8 billion in terms of remittances from the over six million Pakistanis living abroad, principally in the countries of Gulf Cooperation Council (GCC), North America and Europe (Figure 1). In addition to these remittances sent through formal channels, an estimated 40 percent amount is transferred every year through hand-carry, hawala and other informal means. Thanks to a record number of Pakistani workers (about 625,203) who went abroad in 2019 (according to BEOE), remittances to the country were expected to increase further in the coming months. In fact, remittances in the month of February rose by 16 percent year-on-year to US $1.82 billion. The upswing was wide-ranging, with a substantial increase reported for remittances from all the major sources: Saudi Arabia (14 percent), UAE (15 percent), other GCC countries (17 percent), EU countries (18 percent) and US (38 percent).