Ayesha Saba

Pakistan’s external inflows received a notable boost during the first half of the current fiscal year, with workers’ remittances climbing to $19.7 billion and services exports posting strong double-digit growth, providing vital support to the country’s external position.

According to the Monthly Development Update (February 2026) issued by the Economic Policy Wing of the Ministry of Planning, Development and Special Initiatives, remittances increased by 10.6 percent during Jul–Dec FY2025-26 compared with the same period last year. The inflows rose from $17.8 billion to $19.7 billion, marking a substantial gain in foreign exchange earnings.

The report highlights that remittances continued to serve as a stable and reliable source of external support. The steady inflow of funds from overseas Pakistanis helped strengthen household incomes and provided resilience to the broader economy during the recovery phase.

Several factors contributed to the improved remittance performance. These included effective policy measures, a stable exchange rate environment, increased overseas employment opportunities and favorable economic conditions in host countries. Together, these elements encouraged higher formal transfers through official channels.

In parallel, services exports demonstrated strong momentum. The report notes that services exports rose by 16.5 percent to $4.8 billion during Jul–Dec FY2025-26. The growth was largely driven by information and communication technology (ICT), business services and travel-related activities.

The expansion in ICT and business services reflects the growing role of digital and knowledge-based sectors in Pakistan’s external trade profile. Unlike traditional goods, services exports typically require lower physical infrastructure and can scale rapidly, allowing firms to access global markets more efficiently.

At the same time, services imports increased to $6.5 billion, reflecting higher demand for travel, financial and transport services in line with rising economic activity. The report indicates that this trend is consistent with improving domestic consumption and business operations.

Overall, the combination of stronger remittances and expanding services exports contributed positively to the external environment. Sustained foreign exchange inflows help support balance of payments stability and enhance the country’s capacity to manage external obligations.

The Planning Commission’s assessment notes that diversified external earnings are important for long-term resilience. Growth in services exports alongside remittances broadens the base of inflows and reduces dependence on a single source, creating a more balanced external structure.

The increase of nearly $2 billion in remittances within six months, coupled with steady growth in services exports, underscores the strengthening contribution of overseas workers and service-oriented sectors to the economy.

With remittances reaching $19.7 billion and services exports rising to $4.8 billion during the first half of the fiscal year, external inflows remain a key pillar of stability, supporting economic activity and reinforcing confidence in the country’s recovery trajectory.

Credit: INP-WealthPk