ISLAMABAD: The World Bank says that the growth of remittances for Pakistan slowed down by 3.9pc in 2015.

The growth of remittances in 2015 slowed from 16.7pc to 12.8pc for Pakistan followed by 8pc in 2014 to 2.5pc for Bangladesh and from 9.6pc to -0.5pc for Sri Lanka, says the latest edition of ‘Migration and Development — Trends and Outlook’ published on Friday.

The report says in the fourth quarter of 2015, year-on-year growth remittances to Pakistan from Saudi Arabia and the UAE were 11.7pc and 11.6pc, respectively, a significant deceleration from 17.5pc and 42.0pc in the first quarter. Also, depreciation of major sending country currencies like euro, Canadian dollar and the Australian dollar vis-à-vis US dollar may be playing a role, the report says.

According to the report, the growth rate of remittances to developing countries continues to slow down largely due to economic weaknesses in the major remittance-sending countries particularly weak oil prices and currencies in many remittance-source countries.

However, the report expects that the remittances to developing countries are expected to rise to around 4pc a year in 2016-17.

A major downside risk to this forecast is the potential for a decline in outward remittances from Gulf Cooperation Council countries due to continuing weakness in the price of oil. Also, the continued widening of black market premia and imposition of capital controls could limit formal remittance inflows in some countries.

Remittances to India, the region’s largest economy and the world’s largest remittance recipient, decreased by 2.1pc in 2015, whereas remittances to Nepal rose dramatically in response to the earthquake, by 20.9pc in 2015 versus 3.2pc in 2014.

REMITTANCES COST: The average cost of sending $200 to regional countries in the fourth quarter of 2015 was 5.4pc, down from 5.9pc recorded in the fourth quarter of 2014 and the lowest rate among developing regions.

Remittance service operators in the UAE waived fees for remittances to Nepal for a period following the earthquake, leading to the corridor having the lowest average cost (0.2pc) in the fourth quarter of 2015.

Aside from this one-off event, average remittance costs are less than 3pc in the five next lowest-cost corridors, but around 10pc or more in the five highest-cost corridors. Higher costs in the latter group may be due partly to low volumes, lack of competition in the remittance markets in some sending or receiving countries, high regulatory burdens and policy rigidities that limit competition in some market segments.

Published in Dawn, April 17th, 2016