The State Bank of Pakistan reported that remittances sent home by Pakistanis working abroad declined to $27 billion for the fiscal year 2023, compared to $31.3 billion the previous year. In June alone, remittances slumped to $2.2 billion from $2.8 billion in the same period last year, according to central bank data. The major sources of remittances were Saudi Arabia ($515.1 million), the United Kingdom ($343 million), the United Arab Emirates ($324.7 million), and the United States ($272.3 million).
Pakistan’s economic crisis, the worst since gaining independence from Britain in 1947, has been exacerbated by years of financial mismanagement, a global energy crisis, and severe flooding. In response, the International Monetary Fund (IMF) has imposed strict economic measures, and Pakistan’s central bank is seeking a bailout. The approval of a $3 billion short-term financial package from the IMF is pending, with the board set to make a decision on July 12.
To comply with IMF demands, Islamabad has revised its 2023-24 budget and raised its benchmark interest rate to 22 percent. The IMF also required Pakistan to implement over 385 billion rupees ($1.41 billion) in new taxation to meet fiscal adjustments. However, these changes have contributed to skyrocketing inflation, with a record-high year-on-year inflation rate of 38 percent in May, making it the highest in Asia.
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