KARACHI: Pakistan has witnessed a significant 44% increase in workers’ remittances during the first two months of the fiscal year 2025 (2MFY25), providing much-needed relief as the country grapples with external economic pressures.
According to data released by the State Bank of Pakistan (SBP), total remittances amounted to $5.94 billion in July-August FY25, up from $4.12 billion during the same period in FY24, marking an increase of $1.81 billion.
The rise in remittances comes at a crucial time when Pakistan is working to bolster its foreign exchange reserves and manage its external debt obligations. Earlier this year, the country successfully completed a $3 billion short-term bailout package with the International Monetary Fund (IMF). It is now negotiating a $7 billion long-term program aimed at further stabilizing the economy and rebuilding its forex reserves.
Economists have hailed the growth in remittances as a positive sign, particularly as the country seeks to avoid a balance of payments crisis. They believe that the upward trend in remittance inflows will continue in the coming months, aided by a stabilizing exchange rate. All major remittance corridors reported growth, with Saudi Arabia, the United Kingdom, and the United Arab Emirates (UAE) contributing significantly to the increase.
Saudi Arabia emerged as the top source of remittances, accounting for 25% of the total inflows. Remittances from the Kingdom surged by 51%, reaching $1.473 billion in the first two months of FY25, compared to $978 million during the same period last year. The United Kingdom followed, with a 44% increase in inflows, contributing $918 million, up from $636 million in FY24.
Meanwhile, remittances from the United States grew by 23.5%, reaching $622 million during July-August FY25, up from $504 million last year. The UAE also saw a remarkable 84% increase in remittances, with inflows rising to $1.15 billion from $624 million in the previous fiscal year.
Despite the overall growth, the SBP reported a slight month-on-month decline in remittances in August 2024, with inflows dropping by 1.7% to $2.94 billion compared to $2.99 billion in July 2024. However, when compared to August 2023, remittances for August 2024 were up by 40%, underscoring the sharp year-on-year improvement.
The bulk of remittances in August 2024 came from Saudi Arabia, amounting to $713.1 million, followed by the UAE at $538.4 million, the UK at $474.8 million, and the US at $322.4 million.
The increase in remittances offers hope for Pakistan as it continues to navigate economic challenges and seeks long-term stability.
