Central bank projects higher remittances, lower debt servicing needs, and stronger foreign exchange reserves during FY2027
The State Bank of Pakistan (SBP) has projected that workers’ remittances will rise to $44 billion in FY2027, reflecting continued confidence in Pakistan’s external sector and providing support to the country’s foreign exchange reserves.
During an analyst briefing, the central bank stated that remittances are expected to increase by $2.4 billion compared to the estimated $41.6 billion received in FY2026.
The projection comes despite concerns that geopolitical tensions in the Middle East could affect inflows from overseas Pakistanis working in the region.
Remittances Remain a Key Support for Economy
According to the SBP, remittances are expected to remain one of the most important sources of foreign exchange for Pakistan during FY2027. The anticipated increase will help strengthen the country’s external account and support reserve accumulation efforts.
The central bank’s optimistic outlook reflects the resilience of overseas Pakistanis, whose remittances have played a vital role in supporting economic stability over the past several years.
External Debt Servicing to Decline
The SBP also highlighted an improvement in Pakistan’s external debt servicing profile. The total external debt servicing requirement for FY2027 is expected to decline to $21.5 billion, compared with $26.5 billion in FY2026.
Of the projected debt servicing amount, $3.5 billion will comprise interest payments, down from $4 billion in the previous fiscal year. The remaining $18 billion relates to principal repayments.
The central bank noted that approximately $10–11 billion of these repayments are expected to be rolled over or refinanced, reducing the net repayment requirement to around $7.5 billion, compared with $11 billion in FY2026. Moreover, nearly $6 billion of the expected rollover amount has already been arranged in July 2026.
Reserves Target Maintained
SBP reaffirmed its target of raising foreign exchange reserves to $20.2 billion by December 2026 and exceeding $21 billion by June 2027.
Officials explained that the recent decline in reserves was largely due to a $1.4 billion refinancing-related outflow, which is expected to return within weeks. The central bank also noted that forward liabilities have fallen significantly to $0.9 billion, compared with $5 billion in June 2022, creating greater room for reserve accumulation.
Exports Expected to Recover
On the trade front, the SBP expects exports to improve during FY2027. The central bank believes rice exports will rebound after experiencing a significant decline in FY2026, contributing positively to Pakistan’s overall export performance and external sector outlook.