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In December 2024, remittances to Pakistan reached $3.08 billion, reflecting an impressive 29.3 percent year-on-year growth. Saudi Arabia led this surge, contributing $771 million—a 33.4 percent increase compared to December 2023—followed by the United Arab Emirates (UAE) with $631 million, showcasing an exceptional 53.6 percent rise. The United Kingdom also played a significant role, sending $457 million, marking a 24.2 percent growth from the previous year.

During the first half of the fiscal year 2024-25 (July to December 2024), total remittances surged to $17.8 billion, reflecting a robust 32.8 percent increase compared to the $13.4 billion recorded during the same period of the previous fiscal year. This significant growth highlights the strengthening of formal channels for remittance inflows.

On an annual basis, remittances in calendar year 2024 grew by 31 percent compared to CY23, underscoring the consistent improvement. A month-to-month comparison reveals that CY24 consistently outperformed CY23, with December 2024 recording the highest inflows of $3.08 billion.

This steady growth, particularly from May to December, was driven by regulatory reforms, incentives for formal remittance channels, and measures to narrow the black-market and interbank exchange rate gap. These efforts stabilized the rupee against the dollar, providing a strong foundation for the remarkable increase in remittances.

Higher remittance inflows have undoubtedly bolstered Pakistan’s foreign exchange reserves and provided relief to its economic challenges. However, overreliance on remittances can hinder long-term economic stability and growth. Dependence on external inflows exposes the economy to global shocks and often leads to brain drain and reduced focus on developing domestic industries. To mitigate these risks, it is imperative for the government to diversify the economy, invest in productive domestic sectors, promote sustainable use of remittances, and address systemic issues such as inflationary pressures and the outflow of skilled labor. These measures are essential for fostering a more resilient and balanced economic future.

Comments

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Pakistani Jan 14, 2025 12:10pm
Salute and respect to Non Resident Pakistani. Sadly the government fails to serve NRPs. They are hassled by embassies, govt officials, FBR, Banks and Customs. Govt must improve services to NRP.
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Az_Iz Jan 14, 2025 06:16pm
The politicians should not take the easy route of consumption led growth, to spend these earnings. It should be invested to make the economy more productive.
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Az_Iz Jan 14, 2025 06:18pm
Use the money to make the economy more productive.Build roads,dams. Improve rail network,public transportation.Fix canals, electrical T&D losses.Improve health and education infrastructure.
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KhanRA Jan 15, 2025 01:21pm
@Az_Iz , Pakistanis abroad are not giving money to the government. This is money earmarked for their loved ones, and does not belong to the government.
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Az_Iz Jan 15, 2025 06:02pm
@KhanRA,remittances do help the country, as well.When remittances drop,CAD goes up.The govt runs around seeking loans and help from brotherly countries.Not as much,when remittances go up.
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Az_Iz Jan 15, 2025 06:07pm
@KhanRA,everyone knows that,remittances and export earnings,together, pay for imports,interest payments etc.When remittances go down,country struggles,not just the family members.
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Az_Iz Jan 15, 2025 06:09pm
@KhanRA,when remittances are down,reserves shrink faster,there are import curbs in place,which impacts the entire economy.Remittances impact broader economy.
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Az_Iz Jan 15, 2025 06:14pm
@KhanRA,when remittances rise,they are used to pay for imports.What is imported,matters.Luxury items,or something that will make economy productive.The govt has leeway on this,& budget impacts this.
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ZEKI KHAN Jan 16, 2025 11:04am
THIS IS A FAILED GOVERNMENT // IT IS AGAINST GIVING VOTING RIGHTS TO EXPATRIATE COMMUNITY // I WOULD ADVICE THE EXPATRIATES TO INVEST THEIR MONEY ACCROSS THE WORLD WHERE EVER THEY FIND BETTER RETURNS
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