Overseas Pakistanis sent home $20.5 billion in remittances in 2016, an increase of 5.1% over 2015, according to the World Bank. Pakistan's remittances are 7.5% of its 2015 GDP of $270 billion.
Pakistan's Declining Exports:
The World Bank report said 2016 remittances to India declined by 5% to $65.5 billion while Bangladesh received $14.9 billion, a decrease of 3.5% from the previous year.
Declining Remittances to South Asia:
Remittances to South Asia region as a whole declined by 2.3 percent in 2016, following a 1.6 percent decline in 2015. Remittances from the oil-rich GCC countries continued to decline due to lower oil prices and labor market ‘nationalization’ policies in Saudi Arabia, according to the report.
Top Recipients of Remittances:
The top recipients of remittances in 2016 are, India ($65.%b), China ($65.2b), the Philippines ($29.1b), Mexico ($28.1b) and Pakistan ($20.3b) and, in terms of remittances as a share of GDP, Nepal (32.2%), Liberia (31.%), Tajikistan (28.8%), Kyrgyz Republic (25.7%) and Haiti (24.7%).
Pakistan is not alone in seeing its exports decline amid weakness in world demand, particularly in Europe with its slowing economy. However, India's 2016 exports decline is much lower at 5.5% and India's trade deficit actually shrank.
Increase in remittances to Pakistan is good news, especially amid declining worldwide remittances. However, Pakistan can not continue to count on remittances from overseas workers in the midst of low oil prices affecting the GCC nations where millions of Pakistanis work. It must take urgent steps to boost exports and lower its trade deficit to avoid yet another bill-of-payments crisis requiring yet another IMF bailout.