KARACHI — Pakistan has posted its highest-ever annual remittance inflows, with overseas workers sending home a staggering $38.3 billion during the fiscal year 2024–25 — a 27% year-on-year increase. However, the record-breaking year ended on a quieter note, with remittances falling 8% month-on-month to $3.41 billion in June.
The dip, which follows a sharp post-Eid moderation, has raised fresh concerns about the sustainability and volatility of inflows, even as economic migration continues to rise due to political instability and economic pressures at home.
In comparison, June 2024 had seen $3.2 billion in remittances — making this year’s figure an 8% improvement. Yet the decline from May 2025’s $3.7 billion reflects a recurring seasonal pattern where inflows typically ease after major religious holidays.
Speaking to the media, Ali Najib, Deputy Head of Trading at Arif Habib Limited, attributed the sharp annual rise to multiple factors. “A key driver has been the improved economic environment in the Gulf, which has translated into higher earnings for expatriates,” he noted. “Add to that the success of formal remittance channels under the State Bank’s Pakistan Remittance Initiative, and the numbers make sense.”
Najib also pointed to the rupee’s relative stability and tighter currency regulations as catalysts that made official transfer channels more attractive than informal options like hundi or hawala.
The boom in remittances has not only bolstered household incomes but also improved the country’s current account and helped rebuild foreign exchange reserves. “This kind of capital is critical — it’s the backbone of macroeconomic stability right now,” Najib added, predicting modest growth for FY26, with expected remittances touching $39.3 billion.
A closer look at country-wise data highlights some stark contrasts. Saudi Arabia topped the list with $9.3 billion in inflows, up 26%, followed by the UAE with $7.8 billion (up 41%) and the UK with $5.9 billion (up 31%). The European Union also showed strong gains at $4.5 billion, marking a 29% increase.
However, the United States, traditionally one of Pakistan’s top remittance sources, saw a worrying 13% year-on-year decline. On a monthly basis, inflows from the US dropped 10.5% in June, while the UK and UAE also recorded dips of 8.6% and 4.9%, respectively. These three countries, along with Saudi Arabia, account for nearly 70% of Pakistan’s total remittance inflows — a concentration that analysts warn poses significant risks if economic or policy conditions shift in any of these regions.
GCC countries outside of Saudi Arabia and the UAE experienced a steep 16.1% monthly drop, despite showing annual growth. Experts point out that as Gulf states push for localized labor markets and remain sensitive to oil price volatility, the long-term outlook for Pakistani workers in the region remains uncertain.
Flows from non-Gulf developed countries also signaled stagnation: Japan saw a 30.4% annual decline, while Canada and Norway reported drops of 8.6% and 4.3%, respectively. Analysts link this slowdown to tighter immigration policies, inflationary pressures, and declining disposable incomes among overseas communities.
Adding to the concern is the over-reliance on seasonal spikes. Between March and May 2025, remittances surged — peaking at $4.1 billion — largely due to Ramazan and Eid. But the June cooldown underscores how fragile and timing-dependent these inflows remain.
“In order to smooth out the bumps, Pakistan must diversify its labor export markets, shift towards high-skilled migration, and further incentivize the use of formal banking channels,” said Topline Securities CEO Mohammed Sohail. He also noted that Bangladesh recorded $30 billion in remittances this year, highlighting how both countries rely heavily on overseas workers to plug external financing gaps.
Despite the stellar annual performance, the latest data serves as a reminder that remittances — while vital — remain vulnerable to global economic shifts, migration trends, and local policy environments.
