Qudsia Bano

Pakistan recorded a substantial increase in social protection spending and overseas employment registrations during the early months of FY2026, reflecting both rising demand for income support and a growing outflow of workers seeking jobs abroad. The combined trends highlight the importance of welfare programmes and foreign employment opportunities in sustaining household incomes amid economic adjustments.

According to the Monthly Economic Update and Outlook for November 2025, the Bureau of Emigration and Overseas Employment registered 90,339 workers in October, marking a 22.8 percent increase from 73,545 in September. Total registrations during July–October FY2026 rose to 278,613 workers, driven by manpower demand in Gulf economies and continued interest among Pakistanis in seeking overseas opportunities.

Labour migration remains a critical source of household stability and foreign exchange inflows. The report notes that remittances have shown consistent improvement during the period, supported by sustained worker departures and recruitment activity. Analysts believe that higher overseas employment is likely to translate into stronger remittance inflows in the second half of the fiscal year, providing an important cushion for Pakistan’s external account.

Social protection expenditure also saw a notable rise. During July-September FY2026, spending under the Benazir Income Support Programme (BISP) reached Rs143.3 billion, registering a 43.3 percent increase compared to the same period last year. The surge reflects expanded beneficiary coverage, updated payment cycles and additional support components rolled out to address inflationary pressures on vulnerable households.

In addition to federal safety nets, microfinance-driven support continued to play an important role. The Pakistan Poverty Alleviation Fund (PPAF), working in partnership with 26 organisations, disbursed 7,459 interest-free loans worth Rs456.9 million in October alone. Since 2019, cumulative disbursements under the programme have reached Rs121.1 billion, demonstrating the scale of micro-credit outreach to low-income segments across the country.

The report highlights that the combination of rising overseas employment and strengthened social safety net programmes contributed to improving economic resilience during the opening quarter of FY2026. These measures helped reduce immediate financial stress on low-income households, especially in communities affected by earlier seasonal floods and crop losses.

However, the outlook is not without challenges. A mixed agricultural season, rising non-food inflation, and a widening external deficit continue to pressure household budgets. Policymakers believe that sustained attention to job creation, targeted fiscal support and skills development will be essential for maintaining income security.

At the same time, the government is exploring options to enhance foreign employment avenues through bilateral labour agreements, expanded training capacity and improved migration facilitation services. Welfare experts argue that combining overseas employment opportunities with robust domestic safety nets offers one of the most effective strategies for cushioning vulnerable populations during periods of economic transition.

The report concludes that social protection and worker migration trends will remain central to Pakistan’s economic landscape in FY2026, shaping household livelihoods, remittance flows and broader socio-economic stability.

Credit: INP-WealthPk