ISLAMABAD: Finance Minister Muhammad Aurangzeb expects Pakistan’s remittances from overseas citizens will increase to $29 billion this fiscal year, English-language newspaper The National reported on Monday.
Workers’ remittances bring billions of dollars annually from overseas Pakistanis to the South Asian country and are vital for its fragile economy. These inflows bolster foreign exchange reserves, stabilize balance of payments and support the Pakistani currency.
Aurangzeb has been in Washington since Apr. 14 to participate in spring meetings organized by the International Monetary Fund (IMF) and World Bank. His tour is an important one for the South Asian country as Pakistan’s ongoing nine-month, $3 billion loan program with the global lender expires this month.
When asked about the World Bank estimating that remittances would globally drop this year, Aurangzeb said the “reality is it’s the other way round.”
“So, I think we closed the year at about $28 billion last fiscal year and we expect to close at $29 billion this year,” Aurangzeb said. “So, the remittances have not only been holding up, actually during this fiscal year they will actually go up.”
The Pakistani minister had confirmed last week that Islamabad was seeking a “larger and longer” multi-billion-dollar loan program from the IMF and discussions were underway with the Fund’s officials.
“We have had very constructive discussions with the managing director and her very senior team,” Aurangzeb said. “And given that we are successfully completing this program, the Fund has been very receptive in terms of agreeing to consider a larger, longer program.”
On China, which has invested heavily in Pakistan through a multi-billion-dollar road and infrastructure project known as the China–Pakistan Economic Corridor (CPEC), Aurangzeb said Pakistan “missed a trick” by taking too long to monetize projects.
Since its initiation in 2013, CPEC has seen tens of billions of dollars funneled into massive transport, energy and infrastructure projects. But the undertaking has also been hit by Pakistan struggling to keep up its financial obligations as well as attacks on Chinese targets by militants.
“We have been slow over the last few years,” he said. “We are going to move forward with Phase Two so that we can get going with the revenue generating part of the of CPEC.”