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Pakistan's remittances poised to surpass $40 billion, boosting economy
11 million overseas Pakistanis may remit up to $42 billion remittances during financial year 2025-26
- PUBLISHED: Mon 23 Mar 2026, 11:47 AM
Pakistan’s remittance outlook is highly positive and inflows are projected to cross $40 billion milestone for the first time during the fiscal year 2025-26 ending on June 30.
Analysts, economists and banking experts said remittance inflows to Pakistan will continue to sustain a strong upward trend and may reach new all-time high of $41 billion to $42 billion, following a record $38.3 billion inflows remitted during the previous fiscal year 2024-25). They attributed the surge to increased manpower exports, a reduced gap between formal and informal exchange rates, and the government’s active incentivisation of banking channels.
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Latest data released by State Bank of Pakistan (SBP), the central bank, indicates that workers’ remittances registered a double-digit growth during the July-February 2026 period by registering an increase of 10.5 per cent to $26.5 billion compared to $24 billion received during the same period last year.
“Workers’ remittances have registered 5.2 per cent year-on-year increase to $3.3 billion during February 2026. Remittances inflows were mainly sourced from the UAE ($696.2 million), Saudi Arabia ($685.5 million), United Kingdom ($532 million) and United States of America ($319.5 million),” according to the SBP statement.
The outlook for the remainder of 2025-26 remains optimistic, supported by several key growth drivers. Continued uptake of digital channels, most notably the Roshan Digital Account, which had accumulated $11.923 billion in inflows by January 2026, has strengthened formal remittance pathways. Government incentives aimed at curbing informal transfers, combined with improved financial inclusion, have also sustained the upward trend.
Additionally, stable macroeconomic indicators, easing inflation, and a strengthened external sector provide a conducive environment for further remittance growth. High overseas employment levels, particularly in Gulf economies, continue to underpin inflows. As a result, remittances are expected to remain a critical pillar of Pakistan’s external financing and a buffer against global economic uncertainty throughout 2025-26.
Economic lifeline
With a share of around 10 per cent of GDP, home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing the disposable incomes of remittance-dependent households. Many believe the remittance inflows should rise at a steady pace since more than 11 million Pakistanis live overseas, of which 65 per cent regularly send money back to their home country.
“Rising home remittances inflows will help reduce the pressure on the external account of the country. Stability in the Pak rupee-US dollar rate, quick transfer of funds through offiical banking channels and export of manpower are some of the key factors behind the higher remittance inflows to the country,” according to a banking expert.
Dr Ashfaq Hasan Khan, Director-General of National University of Sciences and Technology (Nust), termed higher remittance inflows an economic lifeline of the country and said overseas Pakistanis are expected to keep the growth momentum despite some challenges.
On the impact of the Middle East crisis on remittances, Dr Khan said overseas workers may struggle to maintain steady inflows due to the war like situation in the region. “Pakistan receives most of its remittances from Saudi Arabia, the UAE, Qatar and Kuwait, countries now at the heart of the conflict. Remittances may take a dip in the short term if the crisis ends soon but could rise later if overseas workers return home with their savings and investments after losing jobs or businesses in the region,” Dr Khan told Khaleej Times.
Samiullah Tariq, Head of Research and Development at Pakistan Kuwait Investment Company, said near-term remittance outlook is bright for Pakistan, however, long-term inflows will depend on the economic recovery in the GCC countries, from where major remittances come to Pakistan.
“Pakistan should work on smoother, faster, efficient transfer of money from the Gulf region to Pakistan to increase remittances. Moreover, export of skilled workers to these countries can attract much higher remittances,” Tariq told Khaleej Times.
In reply to a question, he said there’s a possibility that remittances might get affected if the war like situation continues for three months or more.
“More people went to GCC and other countries for employment along with government steps to discourage inflows via grey channels resulting in higher flows through official/banking channels.
Stability in exchange rate also played a major role in increasing remittances,” Tariq concluded.
Remittance Inflows to Pakistan
Financial Year Remittances ($/B)
2020-21 23.00
2021-22 29.4
2022-23 27.33
2023-24 30.25
2024-25 38.3
2025-26 41-42 (Esitmated)
