Pakistan’s remittances totalled $3.1 billion in December, reflecting a 29.3% increase compared to the same month last year, according to central bank data released on Friday.
The data from the State Bank of Pakistan (SBP) showed that the remittances had not only recorded a yearly increase but also registered a 5.6% surge compared to the previous month.
Cumulatively, with an inflow of $17.8 billion, workers’ remittances increased by 32.8% during the first half of the fiscal year 2024-25 (July-December) compared to $13.4 billion received during H1FY24, the central bank said in its statement.
The rise in remittance inflows is linked to Pakistan’s economic recovery, bolstered by IMF loans, a stable local currency, incentives for banks and money exchangers, and the growing trend of skilled Pakistani workers emigrating.
Key factors driving the increase in official remittance flows include reforms that have curbed illegal foreign exchange trading and incentives implemented by the SBP. Furthermore, global inflation rates have decreased, encouraging Pakistani migrants to send more money back home.
Dr Khaqan Najeeb, former Advisor at the Ministry of Finance, told Thenews.com.pk that remittances have seen a substantial rise aided by several tailwinds.
“This has included expansion of the Pakistani diaspora, higher earnings in key destination countries, exchange rate stabilisation (reduced difference between interbank and open market) pushing formal channels, and improved digital infrastructure.”
It is also important to remember, he said, that with high bouts of inflation in the country there is increased demand for support at home from people working abroad. “Higher remittances have played a key role in managing the country’s external account.”
Remittances inflows during December 2024 were mainly sourced from Saudi Arabia ($770.6 million), the United Arab Emirates ($631.5 million), the United Kingdom ($456.9 million) and the United States of America ($284.3 million).
Other GCC countries from where money was sent back home include Oman ($108.5 million), Qatar ($89.2 million), Kuwait ($71.1 million), and Bahrain ($41.2 million), the SBP data showed.
Remittances from the diaspora are a crucial source of external financing for Pakistan as they not only help enhance foreign exchange reserves, but also support the balance of payments.
Moreover, both the central bank and the government expect remittances to hit a record $35 billion in FY25.
Prime Minister Shehbaz Sharif felicitated the nation on record increase in foreign remittances, saying that the claims of those who had been chanting to halt the country’s economy had proven to be baseless.
“Record increase in the foreign remittances reflects the strong commitment of the overseas Pakistanis for playing their role in the development of the country,” he said in a statement.
After achieving economic stability, Pakistan is now on the path of economic growth, the prime minister said, adding that the government was determined to ensure national development and public welfare.
