Qudsia Bano

Pakistan’s overseas remittances recorded a strong 8.4 percent increase during the first quarter of FY2026, reaching $9.5 billion, driven primarily by rising inflows from Saudi Arabia and the United Arab Emirates, according to the Finance Division’s Monthly Economic Update & Outlook (October 2025).

The report said September alone saw inflows of $3.18 billion, representing an 11.3 percent year-on-year rise. Analysts said the increase underscored Pakistan’s steady overseas employment growth and the continued confidence of expatriate workers in formal banking channels.

Saudi Arabia remained the largest contributor, accounting for 24.2 percent of total remittances, followed by the UAE at 20.8 percent, the United Kingdom at 13.5 percent, and the United States at 10.7 percent. Inflows from European countries and other Gulf Cooperation Council (GCC) nations also remained stable, reflecting broader diversification of remittance sources.

The Finance Division noted that the surge in remittances coincided with strong employment trends abroad. Data from the Bureau of Emigration and Overseas Employment showed that 73,545 Pakistanis went abroad for work in September 2025, marking a 43 percent increase from the previous month. The majority secured jobs in Saudi Arabia, the UAE, Qatar, and Oman, where economic activity remains buoyant.

Economists said remittances continued to serve as Pakistan’s “lifeline,” offsetting trade and fiscal imbalances while sustaining domestic consumption. “The consistent inflow of remittances is providing critical support to Pakistan’s balance of payments and helping to stabilize the rupee,” one Karachi-based analyst said.

The Finance Division added that remittances have become more resilient due to improved formal transfer channels, digital remittance systems, and initiatives by the State Bank of Pakistan to facilitate overseas transfers through Roshan Digital Accounts (RDA) and the Pakistan Remittance Initiative.

During the first quarter of FY2026, remittances through RDA crossed $8 billion cumulatively, with the number of accounts exceeding 700,000. “The contribution of overseas Pakistanis continues to grow both in terms of remittances and investment,” the report noted.

The report further stated that the uptick in remittance flows had cushioned Pakistan’s external sector amid global economic uncertainty. The current account recorded a surplus of $110 million in September, narrowing the quarterly deficit to $594 million, thanks in large part to strong remittance performance.

Experts emphasized that remittances also play a major role in poverty alleviation by supporting household incomes and education spending in rural areas. “Every additional billion dollars of remittances adds direct strength to Pakistan’s foreign-exchange reserves and household welfare,” said one economist.

The Finance Division projected that if current trends persist, annual remittances could exceed $40 billion in FY2026. It highlighted the government’s efforts to expand labor-export markets, particularly in the Middle East and East Asia, while encouraging skills certification to improve job quality.

The report concluded that maintaining macroeconomic stability and exchange-rate transparency would be key to sustaining remittance inflows. “Overseas Pakistanis remain the backbone of the country’s external financing framework,” it stated.

Credit: INP-WealthPk