KARACHI: Pakistan’s remittances rose 9.3 per cent to $16.1 billion in the first five months of the fiscal year 2026, data from the central bank showed on Tuesday.
Money sent back by foreign workers increased to $3.2 billion in November, up 9.4 per cent from a year earlier. However, these inflows fell by 7.0 per cent on a month-on-month (MoM) basis.
The rising momentum of remittances persists due to increased manpower exports, particularly to Gulf nations, a reduced gap between official and informal foreign exchange markets, and the continued remittances incentive package by the government. The consistent flow of remittances signals increasing confidence among overseas workers in the country’s ongoing economic recovery, bolstered by a loan programme with the International Monetary Fund (IMF).
Remittance numbers come after the IMF’s executive board approved Pakistan’s latest loan review on Monday. This approval unlocks approximately $1.2 billion for the country. The global lender’s board approved the release of $1 billion under Pakistan’s $7 billion Extended Fund Facility and an additional $200 million under the Resilience and Sustainability Facility (RSF). This brings the total disbursements under both programs to approximately $3.3 billion so far.
Remittances from Saudi Arabia (KSA) and the United Arab Emirates (UAE) continued to dominate, accounting for 45 per cent of total inflows, compared with an average of 44 per cent over the last two years, according to a client note published by JS Global.
Pakistani citizens working in the UAE sent back $675 million in funds to Pakistan in November, up 9.0 per cent from a year earlier, although it was a 4.0 per cent decrease compared with the previous month.
The emigration of workers to the UAE has slightly improved, with its share of total labour exports rising to 6.0 per cent. However, this remains well below the historical average of around 34 per cent from 2012 to 2023, largely due to changes in visa policies.
Nevertheless, any expected relaxation of the UAE’s visa regulations, which is currently being considered, may further support the trend of immigration to the country, the report said. Meanwhile, Saudi Arabia has seen a significant surge, accounting for 70 per cent of total emigration year-to-date, compared with 49 percent from 2012 to 2023.
Money transfers from overseas migrants have supported Pakistan’s external finances, as the current account deficit widened to $733 million in July-October FY26. “With imports expected to rise alongside a gradual economic recovery, we believe FY26 current account balance is likely to close in the red. This showcases the crucial role remittance inflows will play in containing the deficit and supporting external sustainability,” the JS report said.
The SBP expects remittances to exceed $41 billion in FY26 and anticipates the current account deficit will be in the range of zero to 1.0 per cent of GDP during the same fiscal year. The IMF has adjusted Pakistan’s projected current account deficit for FY26, increasing it from 0.4 per cent of GDP to 0.6 per cent of GDP. Analysts attribute this revision to rising imports and slower export growth. They believe that with the potential release of funds from the IMF, the SBP’s foreign exchange reserves will exceed $15.5 billion, which is also the target set by the SBP for December. Additionally, the IMF has raised the reserves target for June 2026 by $155 million to $17.8 billion, aligning with the SBP’s projections.
