ISAMABAD – In a setback, Pakistan economy to face a bigger blow aftercoronavirus outbreak.
The coronavirus outbreak poses a threat to the world’s economy and Pakistanisn’t safe either. Emerging markets that rely on remittances could face abigger blow, which includes Pakistan.
According to a report by Bloomberglink,millions of job losses among overseas workers and international borderclosures are contracting the $690 billion annual flow of global remittancesat a time when many emerging economies need hard currency more than ever.
The report highlighted that this situation will also affect the remittanceincome for Pakistan as almost a third of Pakistan’s money transfers comefrom the U.S. and the U.K., two countries at the epicenter of thecoronavirus outbreak, according to Mohamed Abu Basha, head of macroeconomicresearch at Cairo-based investment bank EFG Hermes.
“I would expect to see a bit of a slowdown for one to two quarters becauseof that exposure,” Abu Basha told Bloomberg, adding that some of the dropwill be offset by lower fuel costs.
The report noted that global remittance flows have reached record highs inrecent years as countries have become more interconnected. Apart from Chinaand Ecuador, most of the reported COVID-19 cases come from industrializednations that are home to the majority of the world’s migrant workers.
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Elina Ribakova, deputy chief economist at the Institute of InternationalFinance in Washington told Bloomberg:
The countries where migrant workers are temporarily based are experiencinga big crisis, and many of them are in the sectors that are being hit.
It is to be noted that remittances to Pakistan crossed the $15 billion markduring the first eight months of this fiscal year (Jul-Feb FY20).
Overseas Pakistani workers remitted $15.126 billion in July to February ofFY20, up by 5.4% as compared to $14.355 billion received during the sameperiod in the preceding year, according to the State Bank of Pakistan.
