Why Remittance to Pakistan is Increasing?

Around 10 million Pakistanis are working abroad in different countries like Saudi Arabia, the US, UK, Kuwait and other Scandinavian countries.  A significant increase has been seen recently in the amount of money coming into the country as remittances. In October 2018, remittances sent by Pakistani workers working overseas increased by 21%, amounting $2 billion dollars which were one of the historic drops in the rupee’s value. This dropping value of rupee accelerated the flow of remittances through banks, currency dealing companies as well as money transferring channels.

One might think that how remittances are affecting Pakistan’s economy and why is it changing over time? Well, firstly, remittances share a magnificent part of Pakistan’s GDP and the trend of the increasing amount of remittances may be caused by the following reasons:

  • Increasing high-skilled labour migration is counted as one of the reasons why remittance funds are increasing. As more people migrate in order to earn money for their families, capital inflow increases.
  • “BRAIN DRAIN” can also be argued as a reason why people are working overseas which is boosting remittances but it also may have the potential cost of this as Pakistan will lose its highly skilled labour.
  • Among 10 million labours, a majority of workers work in Gulf countries, rich for crude oil production and export. A crucial recovery in prices of crude oil also helped Pakistani workers to send more funds to their homes.
  • New policies and measures taken by the new government are also aiming to incentivize remittance inflow. Prime minister’s initiative to motivate overseas Pakistanis to contribute to the country’s economy also has a great impact.


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