There is no denying the reality that remittances play a vital role in the development and growth of developing states like Pakistan. There are millions of overseas Pakistani, who work and toil not only to support their families but also to their country. This piece will give you an understanding of the impact of remittances on Pakistan’s economy. Some of the potential effects are mentioned below:

Poverty Alleviation:

Poverty alleviation is directly associated with remittances as the families remain able to fulfill their requirements in a more appropriate manner. In fact, the families also work on quality of living by enhancing their level of education and increasing the accessibility to the advanced developments.

Reduced Trade Deficit:

Trade deficit in Pakistan is reduced to a great extent owing to lack of sufficient exports and less tax collection. This imbalance gets a good response from the remittance side.

 Investment Opportunities:

A developing state like Pakistan seriously needs investments to promote local business development and reduce unemployment. When there is money above the threshold, then it creates the sense of development of entrepreneurial activities.

Foreign Exchange:

By the inflow of money, there comes the stabilization programme. It then stabilizes balance of payment, strengthening of rupee and trade deficit at massive scale.

Social Development: 

The increased remittances lead to increased social development indicators such as healthcare programmes and education. The human development indicator shows better results in the form of accessibility to basic necessities particularly at grassroot level. 

Rural Development:

Rural development is enhanced to a great extent by the flow of money to rural families. This will certainly help them to work on fulfillment of basic necessities.

Growth of Infrastructure:

Infrastructure development is boosted up with the flow of remittances into Pakistan. Multiple projects are initiated with public private partnership.

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