Pakistan’s remittances were $3.1 billion in December, reflecting a 29.3 percent increase over the same month last year, according to central bank data released on Friday.
Data from the State Bank of Pakistan (SBP) shows that remittances not only recorded an annual increase but also recorded a 5.6 percent increase over the previous month.
Overall, worker remittances increased by 32.8 per cent during the first half of FY2024-25 (July-December), with inflows of $17.8 billion, the central bank said in its statement. compared to $13.4 billion, the central bank said in its statement.
The increase in remittance inflows has been linked to Pakistan’s economic recovery, which has been linked to IMF loans, a stable local currency, incentives for banks and money exchangers, and an increasing trend of emigration of skilled Pakistani workers.
The main factors behind the increase in government remittance flows include reforms that have curbed illegal foreign exchange trading and incentives implemented by the State Bank. Additionally, global inflation has declined, encouraging Pakistani expatriates to repatriate more money.
Dr. Khaqan Najeeb, former adviser to the Ministry of Finance, said Thenews.com.pk That remittances have seen a substantial increase with the help of several tailwinds.
“These include expanding Pakistani diaspora, higher earnings in key destination countries, stabilization of exchange rates (reduction in the gap between the interbank and open market), advancing formal channels, and improved digital infrastructure.”
He said it is also important to remember that with high inflation in the country, there is an increase in the demand for domestic help from people working abroad. “Higher remittances have played a key role in managing the country’s external account.”
Remittance inflows during December 2024 were mainly received from Saudi Arabia ($770.6 million), United Arab Emirates ($631.5 million), United Kingdom ($456.9 million) and United States of America ($284.3 million).
Other GCC countries from which remittances were repatriated include Oman ($108.5 million), Qatar ($89.2 million), Kuwait ($71.1 million) and Bahrain ($41.2 million), SBP data shows.
Remittances from expatriates are an important source of external financing for Pakistan as they not only help to increase foreign exchange reserves but also support the balance of payments.
Additionally, both the central bank and the government expect remittances to reach $35 billion in FY25.
Prime Minister Shahbaz Sharif while congratulating the nation on the record increase in remittances abroad said that the claims of those raising slogans of stopping the country’s economy were proved to be baseless.
“The record increase in foreign remittances reflects the determination of overseas Pakistanis to contribute to the country’s development,” he said in a statement.
The Prime Minister said that after achieving economic stability, Pakistan is now on the path of economic development, adding that the government is determined to ensure national development and public welfare.