- H1FY25 remittances increased 32.8% YoY
- Top remittance sources: Saudi Arabia, United Arab Emirates and United Kingdom.
- Higher incomes and digital infrastructure as drivers.
Pakistan’s remittances reached $3.1 billion in December, an increase of 29.3 percent year-on-year, central bank data showed on Friday, underscoring continued financial support from overseas Pakistanis in a difficult economic context.
Data from the State Bank of Pakistan (SBP) showed that remittances not only recorded an annual increase but also recorded a 5.6 per cent rise over the previous month.
In total, with an inflow of $17.8 billion, workers’ remittances increased by 32.8 percent during the first half of the financial year 2024-25 (July-December) compared to 13.4 billion dollars received during the first half of FY24, the central bank said in its statement.
The increase in remittances is linked to Pakistan’s economic recovery, supported by IMF loans, a stable local currency, incentives for banks and exchange houses, and the growing trend of emigration of Pakistani workers qualified.
The main factors behind the increase in official remittance flows include reforms that curbed illegal foreign exchange trading and incentives implemented by the SBP. Additionally, global inflation rates have declined, encouraging Pakistani migrants to send more money home.
Dr Khaqan Najeeb, former advisor to the Ministry of Finance, said Geo.tv that remittances have seen a substantial increase thanks to several tailwinds.
“This includes expansion of Pakistani diaspora, higher incomes in major destination countries, stabilization of exchange rate (reduced difference between interbank and open market) favoring formal channels and improvement of “digital infrastructure.”
It is also important to keep in mind, he added, that with high inflation surges at home, people working abroad are increasingly demanding support at home. “Increased remittances have played a key role in managing the country’s external account.”
Remittances in December 2024 came mainly from Saudi Arabia ($770.6 million), the United Arab Emirates ($631.5 million), the United Kingdom ($456.9 million) and the United States -United America ($284.3 million).
Other GCC countries from which money was sent back are Oman ($108.5 million), Qatar ($89.2 million), Kuwait ($71.1 million) and Bahrain ($41 .2 million dollars), according to SBP data.
Diaspora remittances constitute a crucial source of external financing for Pakistan as they not only help increase foreign exchange reserves but also support the balance of payments.
Additionally, the central bank and government expect remittances to reach a record high of $35 billion in FY25.
Prime Minister Shehbaz Sharif congratulated the nation for the record increase in foreign remittances, saying the claims of those chanting for the country’s economy to shut down had proven baseless.
“The record increase in foreign remittances reflects the strong commitment of overseas Pakistanis to play their role in the country’s development,” he said in a statement.
Having achieved economic stability, Pakistan is now on the path of economic growth, the Prime Minister said, adding that the government was committed to ensuring national development and public welfare.