In a recent report, the World Bank has stated, the estimated growth in remittances for Pakistan is 9%t, which in result adds up to an impressive total of $24 billion earned by the nation in 2020.
In the latest report produced by World Bank entitled Migration and Development Brief 33, Phase II COVID-19 Crisis through a Migration Lens, the World Bank has established that in both Pakistan and Bangladesh, the negative impact caused by COVID-19–has activated global economic slackening has been somewhat countered by the diversion of remittances from informal to formal channels due to the adversity of transferring money by hand under travel restrictions as well as the enticements to transfer remittances.
Pakistan has launched a tax incentive on July 1, 2020, through which withholding tax was absolved from cash withdrawals or the issuance of banking instruments/transfers from a domestic bank account. The tax incentive is exceeded by the remittance amounts received from abroad into that account in a year, the report added.
The coronavirus‐relevant global downtrend and travel constraint will also influence migratory movements, and this is likely to keep remittances controlled even in 2021, the World Bank included. South Asia was the least‐costly region to send $200 to in the third quarter of 2020. Some of the lowest‐cost corridors along with those commencing in the GCC countries and Singapore and the India‐Nepal corridor had charged below the SDG target of 3%.
Therefore for Pakistan, there was a notably sharp increment in remittances in July, mostly from Gulf Coast countries like Saudi Arabia. This unusual rise in remittances during this time can be associated, in part, with the Hajj effect, with Pakistani migrants in Saudi Arabia transferring home the amount saved for the pilgrimage to Makkah due to a colossal drop in the number of Hajj visas because of the COVID-19-induced restrictions.
Source and Image Credits: TECHJUICE
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