Pakistan remittances witnessed a significant 44% rise in the first two months of FY25, driven by robust inflows from overseas Pakistanis. In July 2024, remittances surged by 48% year-on-year, totaling $2.994 billion, though they slightly dipped to $2.942 billion in August.
This boost in Pakistan remittances offers much-needed relief to the government, which is striving to secure a $7 billion IMF deal. The strong remittance inflow not only enhances Pakistan’s standing with international rating agencies but also opens doors for additional foreign investments. With the country facing $25 billion in debt servicing obligations in FY25, these remittances play a crucial role in stabilizing the economy.
According to the State Bank of Pakistan, total remittances for July-August FY25 amounted to $5.936 billion, compared to $4.123 billion during the same period last year — a notable increase of $1.813 billion.
The upward trend in Pakistan remittances is a positive indicator, particularly as the current account deficit was reduced to $162 million in July FY25, compared to a mere $665 million in FY24. Financial experts believe that continued growth in remittances could allow Pakistan to increase imports, spurring economic growth.
A breakdown of remittances shows that inflows from the UAE saw an impressive 84.3% jump, while Saudi Arabia remained the top contributor with a 50.7% increase. The UK, USA, GCC countries, and EU also contributed significantly to the surge.
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Experts attribute this rise in Pakistan remittances to the government’s crackdown on illegal currency practices, leading to higher dollar inflows into the banking system.
