Washington:

India received $120 billion in remittances in 2023, almost twice the $66 billion received by Mexico in the same period, the World Bank said in a report released on Wednesday.

China ($50 billion), the Philippines ($39 billion), and Pakistan ($27 billion) figure among the top five nations in the list released by the World Bank. The list showed remittances in 2023 after a period of strong growth during 2021-2022. The total was an estimated $656 billion.

“Growing at 7.5 per cent, remittance flows to India touched $120 billion in 2023, reflecting the benefits of a deceleration in inflation and strong labour markets in the United States, the largest destination for India’s skilled migrants, and other OECD destinations, as well as positive demand for skilled and less-skilled workers in the GCC countries (which, together, are the second largest destination for Indian migrants),” the World Bank said.

While the same external demand conditions could have favoured remittance flows to Pakistan, weak internal conditions due to a balance of payments crisis and economic difficulties caused remittances to plummet 12 per cent to $27 billion in 2023, compared with more than $30 billion in 2022, it said.

According to the World Bank, remittance flows to India from the United Arab Emirates, which account for 18 per cent and are the second largest source of India’s remittances after the United States, benefited from the February 2023 agreement.

The latter established a framework to promote the use of local currencies for cross-border transactions and cooperation for interlinking payment and messaging systems between India and the United Arab Emirates.

The use of dirhams and rupees in cross-border transactions is instrumental in channelling more remittances through formal channels. In addition to the United Arab Emirates, Saudi Arabia, Kuwait, Oman, and Qatar account for 11 per cent of India’s total remittances, it said.

The World Bank said remittances to India are expected to grow 3.7 per cent to $124 billion in 2024, and at four per cent to $129 billion in 2025.

India’s efforts to link its Unified Payments Interface with source countries such as the United Arab Emirates and Singapore are expected to reduce costs and speed up remittances, it said.

“Most importantly, the diversification of India’s migrant pool between a large share of highly skilled migrants employed mostly in high-income OECD markets and the less-skilled migrants employed in the GCC markets is likely to lend stability to migrants’ remittances in the event of external shocks,” the bank said.

“Migration and resulting remittances are essential drivers of economic and human development,” said Iffath Sharif, Global Director of the Social Protection and Jobs Global Practice at the World Bank.

“Many countries are interested in managed migration in the face of global demographic imbalances and labour deficits on the one hand, and high levels of unemployment and skill gaps on the other… The resilience of remittances underscores their importance for millions of people,” said Dilip Ratha, lead economist and lead author of the report.

“Leveraging remittances for financial inclusion and capital market access can enhance the development prospects of recipient countries. The World Bank aims to reduce remittance costs and facilitate formal flows by mitigating political and commercial risks to promote private investment in this sector,” he said.

Ahmedabad:

Adani Ports and Special Economic Zone Limited (APSEZ) on Wednesday said four of its ports have been featured in the prestigious ‘Container Port Performance (CPP) Index 2023’, developed by the World Bank and S&P Global Market Intelligence.

While Mundra port was ranked 27th, Kattupalli came in at number 57th, Hazira at 68th, and Krishnapatnam at 71th in the Top 100 list.

“It reaffirms our position as a key player in the global container port industry. This accomplishment is a testament to the hard work and dedication of our team as well as our ongoing commitment to deliver exceptional service to our customers,” said Ashwani Gupta, CEO and Whole Time Director of APSEZ.

The global index is a highly-regarded benchmark that assesses the performance of ports on parameters such as productivity, efficiency and reliability. It serves as a reference point for key stakeholders, including national governments, port authorities, development agencies, supra-national organisations and private operators, of trade, logistics and supply chain services.

Nine ports from India made it to the top 100 list, including four from the Adani portfolio, underscoring the APSEZ’s commitment to operational efficiency and world-class service standards.

Last week, Adani Ports was recognised by CDP (formerly the Carbon Disclosure Project) for its exceptional efforts in tackling climate change and implementing best Environmental, Social and Governance (ESG) practices across its supply chain through a robust engagement programme. The global non-profit organisation assigned APSEZ a leadership band “A-” in both climate change and supplier engagement.

Adani Ports has seven strategically located ports and terminals on the western coast and eight ports and terminals on the eastern coast, representing 27 per cent of the country’s total port volumes.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)

Representational image only.
| Photo Credit: AFP

Pakistan has decided to seek a rollover of around $12 billion debt from key allies such as China in the 2024-25 fiscal year to meet a whopping $23 billion worth of gap in its external financing as the federal government aims to achieve budget targets before the expected arrival of an IMF team to the cash-strapped country.

According to the Finance Ministry insiders, $5 billion from Saudi Arabia, $3 billion from the UAE and $4 billion from China will be rolled over, adding that the estimate of further new financing from China would also be included in the next financial year’s budget, The Express Tribune newspaper reported.

Pakistan will receive more than $1 billion from the International Monetary Fund (IMF) under the fresh loan programme, whereas new financing from the World Bank and Asian Development Bank has also been included in the estimated budget.

According to the Finance Ministry sources, new loan programme agreements will be made with financial institutions. The federal government aims to achieve budget targets before the anticipated arrival of the IMF review mission in Pakistan.

Negotiations for a new loan programme with the global lender are expected to commence in mid-May ahead of the budget which will be presented in June. The Finance Ministry sources said the Ministries had been instructed to complete the targets before the negotiations on the new loan programme.

They added that the details would be given to the IMF delegation when all the important targets were met. It has also been decided to have the budget strategy paper approved by the federal Cabinet before the IMF review mission arrives in the country.

According to the sources, the Finance Ministry has started preparing the budget to set the targets for debt repayment, defence budget and tax collections. Besides, the development and ongoing budget targets will also be determined, according to the paper.

Pakistan has been suffering the chronic ailment of how to meet external liabilities. Traditionally, it depended on remittances, export proceeds and foreign loans to meet its liabilities. But exports haven’t increased to match the imports and avenues of foreign aid have gradually dried up, putting pressure on the Rupee and essential imports.

Last year, it narrowly avoided default due to a timely short-term loan agreement with the International Monetary Fund which provided $3 billion during nine months. The country is once again looking towards the global lender to provide a fresh loan to keep it moving.

In the trying economic conditions, Pakistan has been heavily supported by the remittances its workers living and working around the globe send. The country received the second-highest remittances of the ongoing 2023-24 fiscal at $2.8 billion in April 2024.

According to the State Bank of Pakistan (SBP), the remittances increased by 3.5% to $23.8 billion cumulatively in the first 10 months of FY24 compared to the same period last year.

Remittance inflows during April 2024 were primarily sourced from Saudi Arabia ($712 million), the United Arab Emirates ($542.3 million), the United Kingdom ($403.2 million) and the United States of America ($329.2 million), according to the bank.

The remittances earlier had peaked near $3 billion in the prior month of March 2024, marking a 23-month high.

Separately, the Dawn newspaper reported that Pakistan is engaging with the Chinese leadership for the revival of more than 1800-megawatt of hydropower projects (HPPs) and investment from fresh Chinese companies in the country’s transmission and distribution network as part of the second phase of the China-Pakistan Economic Corridor (CPEC).

The authorities are trying to convene a meeting of the Joint Cooperation Committee (JCC) of the Cabinet on May 22-23 so that Prime Minister Shehbaz Sharif’s upcoming visit to Beijing early next month will be a success.

A high-level delegation led by Planning Minister Ahsan Iqbal is currently in China to pursue existing investors and financial institutions and tap into more firms in the transmission and distribution network as part of CPEC’s second phase.

In his meeting, Mr. Iqbal sought China’s continued cooperation in the early implementation of the Azad Pattan and Kohala hydropower projects. The two sides agreed to hold the next round of the Joint Working Group meeting on Energy (JEWG) soon.

Lucknow:

Not paid salary for three months and after a futile search for another three, a 25-year-old woman, a graduate, hit upon an idea for a start-up. A tea stall. She named it ‘Jobless Chai Wali’.

“I appeared for jobs, but it was difficult to find one in Lucknow. Then I thought let’s have a start-up,” said Pooja Yadav, who is from Varanasi but now lives in the Uttar Pradesh capital.

She said she did not wish to travel outside Lucknow for a job and hence decided to open her own stall.

“Didn’t have a lot of money then so I thought of starting something small,” she said explaining how her tea stall came into being.

For first six months, Ms Yadav hid this information from her family.

Speaking about her experience of being jobless, she said,” I searched for three months and was frustrated. The family knew that I was working but I wasn’t. There were rent worries.”

Asked about the money she makes now, Ms Yadav refused to give an exact number but said that she makes enough to pay salaries of her two employees and even save some money. She earlier earned Rs 15,000 a month.

Expounding on her dreams, Ms Yadav said she wants to have chain of  tea stalls, a cafe and a restaurant.

Ms Yadav, who works at her stall till midnight, told NDTV that she still has not been paid by her former employers.  

The World Bank, in a report on Tuesday, said job creation in South Asian economies is not keeping pace with the rise in the working age population, putting the region on a path that risks “squandering its demographic dividend”.

In India, growth has rebounded strongly after the pandemic, driven by government spending and more recently the construction industry but private investment in the Asia’s third-largest economy has remained weak, hurting job creation.

Over 2000-22, the employment ratio in India declined more than any other South Asian country except Nepal, but preliminary data suggests a rebound in 2023 that partially reversed the earlier decline, said the World Bank.

The World Bank report underscored the need to address several policy weaknesses to accelerate job creation.

Economic activity is subdued in Pakistan, the World Bank noted. Representational
| Photo Credit: Reuters

The World Bank has painted a grim economic picture of Pakistan in its biannual report, cautioning that over 10 million more people are at risk of descending into poverty in the cash-strapped country. The Washington-based lender’s apprehension comes from a sluggish economic growth rate of 1.8% coupled with soaring inflation, a staggering 26% in the current fiscal year.

The World Bank’s biannual Pakistan Development Outlook report indicated that the country is set to miss almost all major macroeconomic targets. The international lender said the country is anticipated to fall short of its primary budget target, remaining in deficit for three consecutive years, contrary to the International Monetary Fund’s stipulations mandating a surplus.

Sayed Murtaza Muzaffari, lead author of the report, said despite a board-based yet nascent economic recovery, poverty alleviation efforts remain insufficient. The economic growth is projected to stagnate at a paltry 1.8% while maintaining the poverty rate at around 40%, with approximately 98 million Pakistanis already grappling with poverty, the World Bank report said.

Pakistan’s cost-of-living crisis

The report underlined the vulnerability of those hovering just above the poverty line, with 10 million individuals at risk of slipping into poverty. The report said that the poor and vulnerable are likely to have benefited from the windfall gain in agricultural output but these gains were offset by continued high inflation and limited wage growth in other sectors that employ many of the poor, such as construction, trade, and transportation.

The wages of daily labourers increased only 5% in nominal terms during the first quarter of this fiscal year when the inflation was above 30%, it said.

The persisting cost-of-living crisis coupled with rising transportation costs could potentially lead to an increase in out-of-school children and delayed medical treatments, particularly for worse-off families, warned the World Bank.

At the same time, it added that food security remains a concern in parts of the country.

Among 43 rural districts across Khyber Pakhtunkhwa, Sindh, and Balochistan, many of which were impacted by the 2022 floods, the prevalence of acute food insecurity is also projected to increase from 29% to 32% in the third quarter of this fiscal year, the report said.

Weak fundamentals

“Despite some recovery, Pakistan’s economy remains under stress with low foreign reserves and high inflation. Policy uncertainty remains elevated and economic activity is subdued, reflecting tight fiscal and monetary policy and import controls,” the World Bank said.

The Washington-based lender said growth is projected to remain below potential with heightened social vulnerability and limited poverty reduction in the medium term. “Financial sector risks, policy uncertainty, and stronger external headwinds pose significant risks to the outlook,” it added.

Pakistan’s current account deficit (CAD) narrowed to $0.8 billion in the first half of the current fiscal year from $3.6 billion in the first half of the last fiscal year, on import controls, reduced domestic demand, and lower global commodity prices, the report said.

Meanwhile, official remittances fell by 6.8% year-on-year in the first half of the current fiscal year due to exchange rate rigidities earlier in the year. “Inflation is projected to remain elevated at 26% in FY24 due to higher domestic energy prices, with little respite for poor and vulnerable households with depleted savings and lower real incomes,” it said.

The World Bank said the fiscal deficit is projected to widen to 8% of the GDP due to higher interest payments but gradually decline as fiscal consolidation takes hold and interest payments fall over time.

Pakistan’s economy is expected to grow by only 1.8% in the current fiscal year ending June 2024 whereas the official target is 3.5 per cent, the World Bank said. For the next fiscal year too, the World Bank has projected only a 2.3% economic growth rate, which is even lower than the population growth rate of 2.6%.

Islamabad:

The World Bank has painted a grim economic picture of Pakistan in its biannual report, cautioning that over 10 million more people are at risk of descending into poverty in the cash-strapped country.

The Washington-based lender’s apprehension comes from a sluggish economic growth rate of 1.8 per cent coupled with soaring inflation, a staggering 26 per cent in the current fiscal year.

The World Bank’s biannual Pakistan Development Outlook report indicated that the country is set to miss almost all major macroeconomic targets.

The international lender said the country is anticipated to fall short of its primary budget target, remaining in deficit for three consecutive years, contrary to the International Monetary Fund’s stipulations mandating a surplus.

Sayed Murtaza Muzaffari, lead author of the report, said despite a board-based yet nascent economic recovery, poverty alleviation efforts remain insufficient.

The economic growth is projected to stagnate at a paltry 1.8 per cent while maintaining the poverty rate at around 40 per cent, with approximately 98 million Pakistanis already grappling with poverty, the World Bank report said.

The report underlined the vulnerability of those hovering just above the poverty line, with 10 million individuals at risk of slipping into poverty.

The report said that the poor and vulnerable are likely to have benefited from the windfall gain in agricultural output but these gains were offset by continued high inflation and limited wage growth in other sectors that employ many of the poor, such as construction, trade, and transportation.

The wages of daily labourers increased only five per cent in nominal terms during the first quarter of this fiscal year when the inflation was above 30 per cent, it said.

The persisting cost-of-living crisis coupled with rising transportation costs could potentially lead to an increase in out-of-school children and delayed medical treatments, particularly for worse-off families, warned the World Bank.

At the same time, it added that food security remains a concern in parts of the country.

Among 43 rural districts across Khyber Pakhtunkhwa, Sindh, and Balochistan, many of which were impacted by the 2022 floods, the prevalence of acute food insecurity is also projected to increase from 29 per cent to 32 per cent in the third quarter of this fiscal year, the report said.

“Despite some recovery, Pakistan’s economy remains under stress with low foreign reserves and high inflation. Policy uncertainty remains elevated and economic activity is subdued, reflecting tight fiscal and monetary policy and import controls,” the World Bank said.

The Washington-based lender said growth is projected to remain below potential with heightened social vulnerability and limited poverty reduction in the medium term.

“Financial sector risks, policy uncertainty, and stronger external headwinds pose significant risks to the outlook,” it added.

Pakistan’s current account deficit (CAD) narrowed to USD 0.8 billion in the first half of the current fiscal year from USD 3.6 billion in the first half of the last fiscal year, on import controls, reduced domestic demand, and lower global commodity prices, the report said.

Meanwhile, official remittances fell by 6.8 per cent year-on-year in the first half of the current fiscal year due to exchange rate rigidities earlier in the year.

“Inflation is projected to remain elevated at 26 per cent in FY24 due to higher domestic energy prices, with little respite for poor and vulnerable households with depleted savings and lower real incomes,” it said.

The World Bank said the fiscal deficit is projected to widen to eight per cent of the GDP due to higher interest payments but gradually decline as fiscal consolidation takes hold and interest payments fall over time.

Pakistan’s economy is expected to grow by only 1.8 per cent in the current fiscal year ending June 2024 whereas the official target is 3.5 per cent, the World Bank said.

For the next fiscal year too, the World Bank has projected only a 2.3 per cent economic growth rate, which is even lower than the population growth rate of 2.6 per cent.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Reserve Bank of India Governor Shaktikanta Das. File
| Photo Credit: EMMANUAL YOGINI

“With India’s current account deficit (CAD) declining sharply to 1% of GDP in Q2:2023-24 from 3.8% in Q2:2022-23,” RBI Governor Shaktikanta Das on February 8 said going ahead, the net balance under services and remittances would remain in large surplus, partly offsetting the trade deficit. 

“India’s services exports remained resilient in October-December 2023, driven by software, business and travel services. Moreover, with around 10.2% share in world telecommunications, computer and information services exports, India is a significant player in the world software business,” Mr. Das said in his statement. 

He said according to the World Bank, with an estimated $135 billion in inward remittances in 2024, India would remain the largest recipient of remittances globally.

On the financing side, Mr. Das said the net foreign direct investment (FDI) stood at $13.5 billion in April-November 2023 as compared with $19.8 billion a year ago.

“Foreign portfolio investment (FPI) witnessed a sharp turnaround during 2023-24 (up to February 6) with net FPI inflows of $32.4 billion as against net outflows of $6.7 billion a year ago,” he said. 

“Net accretions to non-resident deposits and net inflows under external commercial borrowings were also higher during the year,” he added. 

“As on February 2, 2024, India’s foreign exchange reserves stood at $622.5 billion .46 Vulnerability indicators suggest greater resilience of India’s external sector. We are confident of comfortably meeting all our external financing requirements,” he further said. 

Washington:

The war between Israel and Hamas could trigger price shocks for raw materials such as oil and agriculture products if the conflict escalates across the Middle East, the World Bank warned in a report Monday.

Oil has already risen six percent since the latest round of fighting, sparked when Hamas operatives from Gaza entered southern Israel and killed more than 1,400 people, mostly civilians, and seized nearly 240 hostages, according to Israeli officials.

Israel has responded with an unrelenting bombardment of Gaza, which the Hamas-run health ministry says has killed more than 8,000 people, nearly half of them children.

The war between Israel and Hamas comes as Russia’s war in Ukraine has already put pressure on markets, with that war being “the biggest shock to commodity markets since the 1970s,” warned World Bank chief economist Indermit Gill.

“That had disruptive effects on the global economy that persist to this day,” Indermit Gill said in a statement.

“Policymakers will need to be vigilant. If the conflict were to escalate, the global economy would face a dual energy shock for the first time in decades” from both the war in Ukraine and conflict in the Middle East, he said.

Many potential price hikes will depend on what happens to world oil prices and exports, the World Bank said.

In an optimistic scenario, oil could rise 3-13 percent, between $93 and $102 per barrel.

A median scenario envisages prices rising up to $121, while a worst-case scenario would see oil reach a peak of between $140 and $157 — potentially exceeding all-time highs not seen since 2008.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

World Bank President Ajay Banga. File.
| Photo Credit: Reuters

World Bank President Ajay Banga said on October 24 that geopolitic tensions pose the biggest threat to the world economy, but that risks “tend to move around” fast, so others should not be ignored.

“The U.S. 10-year Treasury [yield] just crossed 5% briefly yesterday, these are areas we haven’t seen. So yes, that is right there lurking in the shadows,” Banga said during the annual Future Investment Initiative (FII) in Riyadh.

“And then, how long before the next pandemic?

“There is so much going on in the world and geopolitics in the wars that you’re seeing and what just happened recently in Israel and Gaza. At the end of the day, when you put all this together, I think the impact on economic development is even more serious,” he said.

“While everything looks better than we expected it to look in the developed world some time ago, I think that we’re at a very dangerous juncture.”

The World Bank’s chief economist warned Wednesday that interest rate hikes could spell trouble for countries struggling to deal with debt.

The U.S. Federal Reserve, the European Central Banks and others have raised rates and warned that they could remain high longer than expected in order to bring down elevated inflation.

The International Monetary Fund said Tuesday that the world economy remains resilient despite the fallout from Covid, the war in Ukraine and a cost-of-living crisis, but that it was “limping along, not sprinting.”

“In spite of all of these shocks, we have not seen any big economies really get into trouble. But the good news basically ends there,” said World Bank chief economist Indermit Gill.

“The trouble now is that because of the high rates, the high interest rates that you mentioned, growth is slowing down a lot,” he said at a news conference during the IMF-World Bank annual meetings in Marrakesh, Morocco.

Mr. Gill recalled that during another long period of high interest rates, in the 1970s, around 24 economies were left bankrupt.

“We should expect this tightening cycle to also take long,” he said. “We should expect some countries to (get) into trouble.”

World Bank President Ajay Banga said there was “no doubt” that inflation has begun to come down but that rates will stay higher for longer.

“That can be a complicated event in many ways for investments as well as to people who over the years have got used to a low interest rate environment,” Mr. Banga said.