ISLAMABAD: Workers’ remittances climbed 8.2 per cent to $30.3 billion during July-March FY2026, exceeding Pakistan’s goods export receipts and reinforcing their position as the country’s most reliable source of external financing, according to the Economic Survey 2025-26.
The strong inflow of remittances provided critical support to Pakistan’s external sector at a time when merchandise exports faced challenges and import demand increased alongside the recovery in domestic economic activity. The survey noted that remittances played a key role in strengthening foreign exchange reserves, narrowing the current account gap, and supporting exchange rate stability.
The Gulf region remained the backbone of remittance inflows, with Saudi Arabia and the United Arab Emirates accounting for the largest share of transfers. However, the report also highlighted a notable increase in remittances from the European Union, particularly from Italy, Spain, and Ireland, indicating a gradual diversification of Pakistan’s remittance sources.
According to the survey, this broadening of inflows is a positive development as it reduces dependence on a limited number of countries and enhances the long-term sustainability of remittance earnings.
Several factors contributed to the growth in remittances during the period. Higher overseas employment opportunities, exchange rate stability, and government measures aimed at reducing the cost and improving the convenience of money transfers encouraged overseas Pakistanis to use formal channels for sending funds home.
The survey credited initiatives by the government and the State Bank of Pakistan (SBP) for sustaining strong inflows through the banking system. The wider adoption of digital payment platforms, including Raast, improved transaction speed, accessibility, and transparency, while reforms to the rebate structure for transfer charges lowered costs for both remitters and service providers.
These measures, combined with a stable exchange rate environment, encouraged greater use of banks and exchange companies and helped curb the shift of remittances toward informal channels.
With remittance inflows continuing to outpace export earnings, the survey described overseas Pakistanis as a vital pillar of the country’s external sector, providing a stable source of foreign exchange and helping shield the economy from external financing pressures.
