The Economy of Pakistan
Remittances: The Lifeline
Money sent home by Pakistanis working abroad, mainly in the Gulf, is one of the largest sources of foreign currency.
Workers abroad support the economy.
Scale
Remittances have exceeded $30 billion a year in recent years.
Sources
Saudi Arabia, the UAE, the UK and the US are the main origins.
Informal channels
Some money travels through informal hawala networks, which reduces official inflows.
Effects
Remittances support household consumption and help cover the trade deficit.
A monthly transfer
A Karachi worker in Dubai sends a portion of his wage to his parents.
Assuming remittances alone solve the external gap
They cannot fill it forever.
Key takeaways
- Remittances exceed $30bn.
- The Gulf is a major source.
- Informal channels leak money.
- They support consumption.
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