Despite the global downturn economic in the European countries and other important host countries for Pakistani jobs, sending money to Pakistan has more than tripled in the last ten consecutive months and looks set to continue up. The significance of remittances to the Pakistani economy must be considered. Official remittance flows account for about 55 percent of total goods and services exports (about US$ 26 billion in 2011/12) and corresponding imports (about US$ 40 billion), providing vital support to the country’s precarious current account balance.
Money transfers to Pakistan also inject additional aggregate demand into the economy (around 5.5 percent of GDP), which not only boosts economic growth but also has a positive effect on jobs and poverty, according to previous evidence. Exclusive partnerships exist in many countries around the world, stifling market rivalry and imposing a de facto tax on the remittance sender and the recipient. National post offices, banks, and money transfer companies must form partnerships. Cooperation of remittance technologies should also be encouraged in order to increase the size and lower costs.
What Is The Trend Of Remittance To Pakistan In Recent Months Of 2021?
In a statement, the government and the SBP said that proactive economic measures by the government and the SBP to promote inflows through formal channels, coupled with restricted cross-border travel, hospital bills, and charitable transfers amid the disease outbreak, are fueling the increase in online money transfers to Pakistan. The continued increase in workers’ remittances is also being aided by orderly foreign exchange market factors.
What Are The Formal And Informal Means Of International Money Transfers?
Official remittances have a far greater leverage income effect on the economy than hawala or unofficial remittances. The latter are mostly transfers between the sending and receiving countries, with little ‘real’ additional income and foreign exchange accruing to the labor-sending nation.
In recent years, the scale and effect of informal remittances have gotten a lot of attention. Informal remittances are money transfers that occur through private, unrecorded networks, as opposed to formal remittances, which reach a country through official banking channels or send money to Pakistan online through ACE money transfer. Remittances sent home by friends, family, and even the migrant himself are examples of informal transfers. Although formal remittances to developing countries now exceed $167 billion per year, the amount of informal remittances is practically unknown due to the fact that they mostly pass through unrecorded channels.