In August 2024, the country recorded a significant increase in remittances, reaching $2.94 billion, the year-on-year growth stood at 40.5 percent. This surge is largely attributed to overseas Pakistani workers sending money back home, particularly from major markets like Saudi Arabia, the UAE, the UK, and the USA. With remittances being a crucial pillar for Pakistan’s economy, this influx has played a critical role in supporting the country’s foreign exchange reserves. The rise in remittances was also much needed, particularly amid normalizing repatriation outflows.

The cumulative inflows for the first two months of the fiscal year (2MFY25) witnessed a growth of 44 percent year-on-year with significant growth seen flows from the UAE, KSA and the GCC world. This heightened monthly trend has continued over the last three consecutive months as employment opportunities in Middle Eastern countries like Saudi Arabia and the UAE have improved, with an increasing number of Pakistanis finding work in these regions.

Moreover, the government and the State Bank of Pakistan (SBP) have also introduced policies to encourage the use of formal channels for sending remittances. Incentives for banks and exchange companies to attract more inflows, especially from blue collar workers, have been part of this push.

To ensure that the remittance inflows remain robust, it is essential for Pakistan to continue strengthening formal remittance channels and maintaining a competitive exchange rate. In the longer term, maintaining stable economic policies and enhancing incentives for formal remittance channels will be key to securing a sustainable inflow of remittances.

Comments

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KU Sep 11, 2024 12:03pm
Celebrate remittances of migrants but never acknowledge the reasons that push them to go abroad, or their pain, unhospitable living conditions to ensure survival of families back home. Raison d'etre?
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Arif Sep 11, 2024 12:36pm
Month on Month is a decline , something which most newspapers conveniently or forced to ignore.
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MZI Sep 11, 2024 01:52pm
Good news for economy, bad news for PTI politics that is centered on creating a narrative of destruction of Pakistan's economy. If this momentum continues, we'll see stronger growth after many years.
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Az_Iz Sep 11, 2024 05:43pm
Amazing. Let's hope the momentum continues. And more importantly the advantage is not wasted in just consumption, but to make the economy more productive.
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Az_Iz Sep 11, 2024 06:12pm
At least, part of the reason for higher remittances is, crackdown on illegal channels, still in force. The current government can be given, some credit, and benefit of the doubt.
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Az_Iz Sep 11, 2024 06:26pm
The assumption that the crackdown on illegal channels started by caretaker govt with help from establishment would end, with this govt,hasn't happened.So this govt's score on honesty goes up a notch.
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Sunny Sep 11, 2024 11:14pm
Government unfortunately not focused on Exports, it's the only Solution to boost Economy, Factories are closing down rapidly because of Highest Utility charges which is damaging whole Economy
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