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Country Report Pakistan Product Image

Country Report Pakistan

  • ID: 2101420
  • October 2014
  • Region: Pakistan
  • 25 Pages
  • The Economist Intelligence Unit

According to the State Bank of Pakistan (SBP, the central bank), workers' remittances rose by 33.8% year on year in September, to US$1.7bn. Remittances in January-September rose by 18.7% to US$12.7bn, compared with the year-earlier period.

Remittances from the four largest source countries-Saudi Arabia, the UAE, US and UK, which together comprise 78.3% of the total-all grew strongly in September. Growth was particularly strong in remittances from Saudi Arabia and the UAE, rising by 32.7% and 43.8% year on year to US$496m and US$394m respectively. Both countries are experiencing robust economic growth, which has probably contributed to the rise in remittances there. The Economist Intelligence Unit estimates that both countries' real GDP will grow by at least 4% in 2014 and forecasts that their GDP growth will accelerate in 2015. Remittances from the US and the UK in the January-September period grew by 15.2% and 8.2% to US$1.9bn and US$1.7bn respectively, which probably reflects the economic recovery in those two countries.

Remittances to Pakistan, which experienced double-digit year-on-year growth for seven of the first nine months of 2014, have contributed to the strengthening of the Pakistan rupee against the US dollar so far this year. The rupee appreciated from PRs105.4:US$1 on January 1st to PRs102.7:US$1 on September 30th. Although increasing remittances support the country's weak balance-of-payments position, they are unlikely to arrest an anticipated widening of the current-account deficit owing to a persistent deficit on the goods and services account, which widened to US$13.3bn in January-August 2014 from US$11.9bn in the same period a year earlier, according to the SBP.

Country Report Pakistan

Remittances jump in September
Impact on the forecast

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