Pakistan’s remittances totaled $3.1 billion in December 2024, reflecting a 29.3% increase compared to the same month last year, according to data released by the central bank.
The State Bank of Pakistan (SBP) reported that not only had the remittances recorded a yearly increase, but also a 5.6% surge compared to the previous month.
Cumulatively, remittances for the first half of the fiscal year 2024-25 (July-December) stood at $17.8 billion, showing a 32.8% increase compared to $13.4 billion received during the same period in FY24, the central bank stated.
The rise in remittance inflows is linked to Pakistan’s economic recovery, aided 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 offered by the SBP. Additionally, the decrease in global inflation rates has encouraged Pakistani migrants to send more money home.
Dr. Khaqan Najeeb, former Advisor at the Ministry of Finance, told “Thenews.com.pk” that the substantial rise in remittances was aided by several favorable factors.
“This included the expansion of the Pakistani diaspora, higher earnings in key destination countries, exchange rate stabilization (reducing the gap between the interbank and open market rates), and improved digital infrastructure.”
He also pointed out that with high inflation in the country, there has been increased demand for financial support from workers abroad. “Higher remittances have played a crucial role in managing the country’s external account.”
The majority of remittances in December 2024 came from Saudi Arabia ($770.6 million), the UAE ($631.5 million), the UK ($456.9 million), and the USA ($284.3 million).
Other GCC countries also contributed, including Oman ($108.5 million), Qatar ($89.2 million), Kuwait ($71.1 million), and Bahrain ($41.2 million), according to SBP data.
Remittances from the diaspora are a critical source of external financing for Pakistan, as they not only help increase foreign exchange reserves but also support the balance of payments.
Furthermore, both the central bank and the government expect remittances to reach a record $35 billion in FY25.
Prime Minister Shehbaz Sharif congratulated the nation on the record increase in foreign remittances, stating that the claims of those who predicted the country’s economic downfall had proven baseless.
“The record increase in foreign remittances reflects the strong commitment of overseas Pakistanis to play their role in the country’s development,” he said in a statement.
After achieving economic stability, Pakistan is now on the path to economic growth, and the government is determined to ensure national development and public welfare, the Prime Minister added.
