Macro Bites

Macro Bite # 95

2 min read
 Former Prime Minister Imran Khan’s popularity amongst overseas Pakistanis is no secret. It is why his government persistently pushed for the right to vote for Pakistanis based abroad, and is also why we saw a lot of cringey social media videos after the 2018 elections of people promising to come back home and serve their country—none of whom have been heard from since. More recently, when Khan was ousted in a no-confidence motion, many claimed that overseas Pakistanis would stop sending remittances to the country. The data however tells a different story, with remittances in April hitting their highest level in Pakistan’s history.

Monthly remittances in April crossed USD 3 billion for the first time ever. While Shehbaz Sharif will try to claim credit for these numbers, in much the same way that Imran Khan did previously, the reality is that remittances are not a partisan issue. People send remittances simply to provide cash to their loved ones back home, not as an act of national service.

Some other factors that have led to a rise in remittances are the crackdown on illegal hawala/hundi services, and the Pakistan Remittance Initiative (PRI). The PRI, a joint initiative between the State Bank, Ministry of Overseas Pakistanis, and the Ministry of Finance, simplified the process of sending remittances to Pakistan, and also offered loyalty points to incentivize overseas citizens to use the service. These boring administrative measures, for which the PTI government should get some credit, have likely had a bigger impact on remittance numbers than anyone’s political allegiances.

WEEKLY DATA WATCH   

KSE-100 fell this week, as the government’s indecision over fuel prices and an IMF loan caused market uncertainty. PKR depreciated to record lows this week, due to strengthening of the USD in international markets and a rise in US interest rates. Local gold prices rose this week.

The annual change in the Sensitive Price Index fell to 15.85% vs. 15.86% two weeks prior (no data last week due to Eid). The poorest of the country (Q1) experienced a change of 13.93% vs. 16.94% for Q5. On a weekly basis, prices rose for all quintiles by 0.49%.

Increase in prices of Wheat (+41.8%) and Chicken (+12.1%) contributed to weekly inflation. A fall in the price of Electricity (-10.7%) and Bananas (-5.87%) helped moderate inflation this week.

What Else We’re Reading (Local)

  • The Asian Development Bank has indicated that it will provide USD 2.5 billion to Pakistan in assistance over the next fiscal year. (Profit)
  • Despite rising car prices, there is no indication of a slowdown in demand. (Business Recorder)

What Else We’re Reading (International)

  • Cryptocurrency valuations are in freefall, with USD 200 billion wiped off the market in a single day. (Bloomberg)
  • Finland and Sweden are expected to join NATO imminently, in response to Russia’s invasion of Ukraine. (FT)

Asad Pabani

Journalist, researcher and documentary filmmaker. Prior works featured in Dawn, Soch Videos and Pioneers Post.

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