Pakistan witnessed a significant boost in workers’ remittances, with inflows reaching $3.1 billion in December 2024. This marked an impressive 29.3% year-on-year (YoY) increase and a 5.6% month-on-month (MoM) rise, underscoring the resilience of remittance flows despite global economic challenges.
Cumulatively, remittances for the first half of the fiscal year 2025 (H1FY25) totaled $17.8 billion, reflecting a robust 32.8% growth compared to $13.4 billion recorded during the corresponding period in H1FY24. This surge highlights the pivotal role of overseas Pakistanis in supporting the country’s economy through their contributions.
The December inflows were primarily driven by four key countries: Saudi Arabia, which accounted for $770.6 million, followed by the United Arab Emirates ($631.5 million), the United Kingdom ($456.9 million), and the United States ($284.3 million). These regions continue to serve as major sources of remittance inflows, benefiting from longstanding expatriate communities and improved banking channels facilitating transfers.
The remarkable growth in remittances during H1FY25 is attributed to several factors, including enhanced digitalization of remittance channels, targeted government policies, and initiatives by financial institutions to streamline the process for overseas workers. Additionally, the competitive exchange rate and incentives for using formal banking channels have played a crucial role in encouraging remittance flows.
These inflows are vital for Pakistan’s economy, providing much-needed support to the balance of payments and aiding in the stabilization of foreign exchange reserves. As of January 2025, the State Bank of Pakistan’s reserves stand at a robust $11.7 billion, further bolstered by remittance contributions.
The government and the State Bank of Pakistan have been actively promoting initiatives to facilitate remittances through legal channels, ensuring quicker and more secure transactions. These measures include partnerships with international money transfer operators, digitization of remittance processes, and public awareness campaigns targeting overseas Pakistanis.
The continued reliance on remittances from Saudi Arabia, UAE, the UK, and the US underscores the importance of fostering strong diplomatic and economic ties with these nations. These inflows serve not only as a financial lifeline for millions of households in Pakistan but also as a key driver for economic stability, particularly in times of fiscal challenges.
Pakistan’s growing remittance landscape reflects a positive trajectory in the country’s economic management and the trust of its diaspora in formal financial systems. With the government’s commitment to further enhancing remittance channels and introducing policies to incentivize overseas workers, the upward trend in remittances is expected to continue, contributing significantly to Pakistan’s economic recovery and growth.
The robust inflow of $3.1 billion in December 2024 and the cumulative $17.8 billion during H1FY25 demonstrate the critical role remittances play in fostering economic resilience and ensuring financial stability for Pakistan.