Remittances Hit Record $38.3 Billion in FY25, Fueling Pakistan’s Economy

KARACHI: Pakistan received a record $38.3 billion in workers’ remittances during fiscal year 2025, the State Bank of Pakistan (SBP) said on Monday. This shows a 26.6% jump from $30.3 billion in FY24 — the highest annual inflow in the country’s history.

In June 2025 alone, remittances hit $3.4 billion. That’s an 8% increase compared to the same month last year. The sharp rise came due to economic recovery, stable exchange rates, and government incentives. These steps encouraged overseas Pakistanis to use formal banking channels.

In March 2025, remittances reached $4.1 billion — the highest ever for a single month. Analysts say the surge reflects growing trust in Pakistan’s financial system and closer economic links with Gulf nations.

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Gulf and Western Countries Lead the Flow

Saudi Arabia remained the top source in June 2025, sending $823.2 million. The UAE followed with $717.2 million. The UK sent $537.6 million, while the US contributed $281.2 million.

Mohammed Sohail, CEO of Topline Securities, said FY25 set a new record. “Pakistan received $38.3 billion — up 27%. This strengthens foreign reserves and the rupee,” he said.

The IMF’s loan program supported this rise by boosting economic confidence. The exchange rate stayed stable, which encouraged remittances. Pakistan also expanded digital banking and improved financial systems. This shift helped capture more inflows through legal channels.

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New Targets and Projections for FY26

Building on FY25’s success, the government set a $39.4 billion remittance target for FY26. Earlier this year, SBP Governor Jameel Ahmad had predicted remittances would cross $38 billion — a target now met.

Despite strong inflows, officials revised current account forecasts. Instead of a $1.5 billion surplus for FY25, they now expect a $2.1 billion deficit in FY26. That’s about 0.5% of GDP.

Analysts believe remittances will stay vital for the economy. They help ease pressure on reserves and support the rupee. With external debts rising and investment uncertain, overseas workers continue to play a key role in stabilizing Pakistan’s economy.