Qudsia Bano

Workers’ remittances to Pakistan posted a steady increase in August 2025, reaching $3.1 billion. The inflows marked a year-on-year growth of 6.6 percent, highlighting the continued support of overseas Pakistanis to the national economy through formal banking channels.

According to data released by the State Bank of Pakistan (SBP), during the first two months of the current fiscal year (FY26), cumulative remittances stood at $6.4 billion, reflecting a 7 percent rise compared to $5.9 billion received in the same period of FY25. The consistent improvement underlines the importance of remittances as one of the country’s most reliable sources of foreign exchange earnings, which are critical in bridging the external financing gap.

A closer look at the country-wise breakdown shows that Saudi Arabia remained the leading contributor with $736.7 million in August. The United Arab Emirates followed with $642.9 million, while inflows from the United Kingdom and the United States amounted to $463.4 million and $267.3 million, respectively. These four countries collectively made up the largest share of total remittances, reaffirming their position as key corridors of inflows for Pakistan.

The rise in remittances comes at a crucial time when Pakistan is working to strengthen its foreign exchange reserves and ensure stability in the balance of payments. With import pressures and debt repayments continuing to weigh on the external account, these inflows serve as a vital buffer. They not only provide liquidity to the economy but also support the exchange rate by ensuring a steady supply of foreign currency.

Remittances remain a key driver of household consumption in Pakistan as well, directly contributing to domestic demand. Their stable growth in the opening months of FY26 offers some relief to policymakers navigating a challenging external financing environment.

Credit: INP-WealthPk