Moaaz Manzoor

 Pakistan’s economy thrives, as a stable currency fueled a record $38.3 billion in remittances for 2024-25, driving financial strength and growth. According to the State Bank of Pakistan, the remittances jumped to $38.3 billion from $30.25 billion last year, registering an increase of 27%.

This surge, driven by the steady exchange rates, has encouraged overseas workers to send money through the legal channels, boosting the country’s foreign exchange reserves. Talking to WealthPK, Dr. Nasir Iqbal, Head of Macropolicy Lab at the Pakistan Institute of Development Economics (PIDE), called remittances a key dollar source.

They ease pressure on our reserves, helping Pakistan meet import needs, he said. However, he stressed the need to boost exports. “Other countries face low growth and unemployment, which could affect remittances. We must diversify our foreign reserves,” Iqbal added. A stable currency has made formal remittance channels more reliable, encouraging more inflows.

 Aamir Hussain Siddiqui, senior research economist at the Applied Economics Research Centre, credited subsidies for legal remittance channels. “These incentives caused a surplus in the current account balance. However, the government has allocated less money for these subsidies this fiscal year. The coming months will show if this growth continues,” Siddiqui said. The policy’s success has significantly strengthened Pakistan’s economy.

The remittance boom is becoming a key feature of Pakistan's economy, as it supports families, funding education, healthcare, and local businesses. A stable currency ensures these funds stretch further, boosting spending and economic activity. The finance ministry’s July outlook report projects inflation at 3.5-4.5%, down from 23.4% last year, with June at 3.2%, aiding the impact of remittances.

Manufacturing is also growing, with car production up 40% and cement exports rising by 29.5% to 9.2 million tonnes, though domestic cement sales dipped slightly. Meanwhile, the Asian Development Bank (ADB) projects 3% growth for Pakistan in 2026, supported by strong remittances and a stable currency.

Experts urge continued focus on legal remittance channels and export growth to maintain this momentum. With a steady rupee driving record inflows, Pakistan’s economy is on a promising path, showcasing the power of diaspora support.

Credit: INP-WealthPk