Overseas Pakistanis, in October 2024, sent a record $3.05 billion in remittances, marking Pakistan’s highest-ever monthly inflows. The remittance surge shows a 29% increase compared to $2.46 billion in October last year and a 7% rise from September 2024.
According to Topline Securities, these record inflows will help stabilize the Pakistani rupee and contain the country’s current account deficit. Remittances play a crucial role in supporting Pakistan’s economy, particularly by adding foreign currency reserves and reducing dependency on external financing.
Remittances Growth by Month and Year
In its press release, the State Bank of Pakistan noted a 6.7% increase in remittances from September to October 2024. Compared to October 2023, remittances rose by 23.9%, showcasing significant growth. Cumulatively, workers’ remittances from July to October of the 2024-2025 fiscal year reached $11.8 billion, marking a 34.7% rise compared to $8.8 billion in the same period last year.
Key Sources of Inflows
The largest remittance inflows came from Pakistanis working in Saudi Arabia, the United Arab Emirates, the United Kingdom, and the United States. Saudi Arabia topped the list with $766.7 million, followed by the UAE with $620.9 million. The UK and the US contributed $429.5 million and $299.3 million, respectively. These countries continue to be the main sources of foreign remittances, driven by Pakistanis working in diverse fields abroad.
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Implications for the Economy
The rise in remittances is expected to provide a buffer for Pakistan’s foreign reserves, which are under pressure due to external debt payments and the trade deficit. Increased remittances also reduce pressure on the government to borrow externally, contributing to more financial independence. The higher inflow may ease inflationary pressures by strengthening the local currency and reducing import costs.
Key Factors Driving the Surge
Economic analysts attribute the surge to various factors, including higher global demand for foreign labor and the government’s efforts to promote legal remittance channels. Digital banking advancements and incentives for Pakistanis abroad have also contributed to this rise, encouraging more people to send money home through official channels.
Government’s Role in Supporting Remittances
The government’s initiatives to facilitate remittance flows have also played a role in the recent uptick. Incentives such as reduced transaction fees, faster processing times, and collaborations with financial institutions aim to streamline the remittance process. These measures ensure that funds reach families in Pakistan faster, making the process more appealing for overseas Pakistanis.
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