Abdul Ghani

Worker remittances continued to play a stabilizing role for Pakistan’s external account, with inflows rising by 7 percent to $6.4 billion in the first two months of FY2026. The Monthly Economic Update & Outlook – September 2025 issued by the Finance Division highlights that remittances remain one of the country’s most resilient and dependable sources of foreign exchange.

The report shows that Saudi Arabia remained the largest source of inflows, contributing 24.6 percent of the total, followed by the United Arab Emirates at 20.6 percent. Strong inflows from Gulf countries underline Pakistan’s reliance on its overseas workforce, particularly in the Middle East, where millions of expatriates are employed in sectors such as construction, services, and domestic work.

In addition to the Gulf, remittances from the United States, the United Kingdom, and other advanced economies also supported the inflows, reflecting the diverse global footprint of Pakistani workers.

The Finance Division observed that remittances not only offset part of the trade deficit but also provided critical support to household consumption across Pakistan. Given that millions of Pakistani families depend on overseas income, steady inflows have helped cushion the impact of inflation and currency depreciation on living standards.

Despite this positive development, the report also noted a slowdown in emigration. In August 2025, only 51,444 workers were registered for overseas employment, marking a decline of 18.7 percent compared to 63,285 in July. Analysts suggest that if this trend persists, future remittance growth could moderate.

Nonetheless, the resilience of remittances in FY2026 so far offers significant support to the external sector. The Finance Division stressed the importance of policies to maintain strong linkages with overseas workers and to further encourage the use of formal banking channels for remittance transfers.

Credit: INP-WealthPk