By Qudsia Bano

Pakistan's rapidly growing information technology (IT) exports and record workers' remittances are expected to provide a stronger cushion against external shocks and support the country's balance of payments during FY2026-27, according to the Finance Division.

The Monthly Economic Update & Outlook (June 2026) states that Pakistan's external account has become more resilient as higher inflows from overseas Pakistanis and sustained expansion in IT exports offset pressures from higher imports and global economic uncertainty.

According to the report, IT services exports increased by 20.4% during July-May FY2025-26, reaching $4.2 billion. The continued growth reflects rising global demand for Pakistan's digital services and the expanding contribution of the information technology sector to the country's export earnings.

Workers' remittances also continued to set new records. The report notes that Pakistan received its highest-ever monthly remittance inflow of $4.3 billion in May 2026, while cumulative remittances during July-May FY2025-26 rose by 9.2% to $38.1 billion. Saudi Arabia remained the largest source of remittances with a 23.5% share, followed by the United Arab Emirates with 21%.

According to the Finance Division, the sustained increase in these two foreign exchange sources helped Pakistan record a current account surplus of $255 million during the first eleven months of FY2025-26 despite an increase in imports. The report says stronger external inflows also contributed to improved foreign exchange reserves and greater resilience against external financing pressures.

The report highlights that foreign exchange reserves reached $21.5 billion by June 19, 2026, including $15.9 billion held by the State Bank of Pakistan. The improvement in reserves has strengthened Pakistan's ability to meet external financing requirements and maintain exchange rate stability.

According to the document, continued expansion in digital exports is expected to diversify Pakistan's export base beyond traditional merchandise exports, while remittances will remain an important source of household income, domestic consumption and foreign exchange earnings. Together, these inflows are expected to reinforce the country's external position during FY2026-27.

The Finance Division notes that improving macroeconomic stability, ongoing reforms and stronger investor confidence are expected to create a favourable environment for further growth in IT services. At the same time, continued overseas employment is likely to sustain remittance inflows, providing additional support to the balance of payments.

According to the report, record remittances and expanding IT exports have become key pillars of Pakistan's external sector. Their continued growth is expected to strengthen foreign exchange reserves, improve external stability and support sustainable economic growth in the coming fiscal year.

Credit: INP-WealthPk