Remittances likely to rise

A World Bank report said remittances were expected to receive a boost with a rise in growth in the GCC countries from 2018 onwards, due to a more relaxed fiscal stance, more infrastructure investments, and reforms to promote the non-oil private sector growth.

Meanwhile, new legislation in Kuwait approving the imposition of taxes on remittances dampened predictions. It joins the introduction of a value added tax (VAT) in Saudi Arabia and UAE as prime factors that may slow remittance outflows from the region.

R. Madhusoodanan, general manager of Global Money Exchange, said, “Costs incurred during transfers to Pakistan are cheaper than most other countries. For that reason, Pakistan is the cheapest corridor for remittances from Oman.”

The World Bank report said remittances to South Asia increased by 5.8 per cent in 2017 after a slowdown of –6.1 per cent in 2016. In India, after a steep decline of -8.9 per cent in 2016, remittances grew 9.9 per cent in 2017 with total remittances reaching $69 billion. The World Bank expected the upward trend to continue into 2018 on the back of strong economic conditions in advanced economies, particularly the USA, and rising oil prices that should boost the economies of the GCC.

Meanwhile, Pakistan’s remittance inflows remained flat last year due to a declining outflow trend in Saudi Arabia, its largest remittance source. While the trend continued into early 2018, remittance flows from the United States, UAE, and the United Kingdom accelerated.

In Bangladesh, after a steep decline in 2016 (–11.5 per cent), remittances were flat in 2017. They now show a promising uptick, driven by strong inflows from the main source countries — Saudi Arabia, the United Arab Emirates, the United States, Kuwait, and Malaysia. Sri Lanka, in contrast, saw a slowdown of –0.9 per cent in 2017.