Tag: Pakistan

Political uncertainty remains constant in Pakistan, despite a change of government after the general elections. Amid an uncertain economic outlook with high downside risks, the private sector’s participation in economic growth remains unnoticeable as it is not borrowing from banks for business expansion. The State Bank of Pakistan’s (SBP) latest data showed that the private sector borrowing dropped 36.95pc to just Rs 191.5 billion in the first nine months of FY24. The real estate sector, one of the major contributors to economic growth, has crashed and the construction industry is operating at 20pc of its capacity. The high cost of doing business restricts the private sector from borrowing expensive money. In fact there is likely to be more economic uncertainty if the law and order situat...

Since January 2022, Pakistan’s economy has been struggling with a significant dip in its remittances, further aggravating its already distressed economic conditions. Given the developmental needs of the country and current inflationary pressure, a further 10 percent decrease in remittance flow in FY23, as per the World Bank’s report[1], is a severe blow to the nation’s economic health. Between 2022 and 2023, the remittances have plummeted by almost 16 percent[2]. To put it into absolute numbers, in FY23, remittances were reduced by $4.25 billion year-on-year. The situation in Pakistan becomes even more concerning when we contrast it with the rising remittance flow in the South Asian region. As per the World Bank[3], in 2022, South Asia received remittances worth $176 billion, which ove...