Pakistan’s economy received a significant boost in February 2025 as workers’ remittances surged to an impressive $3.1 billion, according to the latest figures released by the State Bank of Pakistan (SBP). This marks a notable year-on-year (YoY) increase of 38.6 percent and a month-on-month (MoM) growth of 3.8 percent, underscoring the resilience and importance of overseas Pakistani workers in supporting the country’s balance of payments and household consumption.
The continued strength in remittances has contributed to a cumulative inflow of $24.0 billion during the first eight months (July–February) of FY2024–25. This represents a robust 32.5 percent rise compared to the $18.1 billion received during the same period in the previous fiscal year (FY2023–24). The impressive growth trend signals renewed confidence among overseas Pakistanis and may reflect improved formal channels of transfer, policy initiatives, and enhanced transparency in remittance processing.
Geographically, the bulk of remittances in February 2025 came from four key regions, which have consistently remained the top contributors to Pakistan’s remittance flows. Saudi Arabia led the way with $744.4 million, followed by the United Arab Emirates (UAE) at $652.2 million. The United Kingdom contributed $501.8 million, while the United States accounted for $309.4 million. These figures reaffirm the continued reliance on the Gulf Cooperation Council (GCC) and Western nations as dominant remittance sources for Pakistan.
The rise in remittance inflows comes at a crucial time for Pakistan’s economy, which is navigating through external account challenges, including a widening current account deficit, rising import pressures, and limited financial inflows. As such, remittances play a vital role in cushioning the economy against foreign exchange vulnerabilities, supporting household incomes, and stabilizing consumption.
Analysts suggest that the steady increase in remittances is likely fueled by multiple factors. These include increased overseas employment opportunities for Pakistani workers, efforts by the government and the State Bank of Pakistan to incentivize legal channels for money transfers, and the broader global economic recovery that has improved income levels in host countries. Additionally, exchange rate management and better digital infrastructure for financial transfers may have helped direct more inflows through formal channels, reducing reliance on informal mechanisms like hawala and hundi.
Remittances have long served as a critical economic lifeline for Pakistan, often acting as a buffer during periods of fiscal and external stress. Their role is especially vital in times when foreign direct investment (FDI) and exports experience volatility. The $24 billion received so far in FY25 is a promising indicator that the country might surpass previous annual remittance records if the current trend continues in the remaining months of the fiscal year.
As the government and the central bank continue to monitor external account developments, a sustained rise in remittance inflows can help alleviate pressure on the foreign exchange reserves, support the Pakistani rupee, and contribute to broader economic stability.
In light of these developments, policymakers are expected to maintain and potentially expand initiatives that support and streamline remittance inflows, especially through formal financial institutions and digital banking channels, in a bid to harness their full potential for national economic growth.