Pakistan’s remittances hit $3.2 billion in July

Pakistan received $3.2 billion in workers’ remittances during July, marking a 7.4% year-on-year increase, the State Bank of Pakistan (SBP) said on Friday, raising hopes that the arrival might cross full-year target of $39 billion.

The surge was led by inflows from key overseas labor markets, with Saudi Arabia contributing $823.7 million, the United Arab Emirates $665.2 million, the United Kingdom $450.4 million, and the United States $269.6 million.

If the current monthly trend persists, Pakistan could be on track to meet or exceed the $38 billion target set for the ongoing fiscal year.

Analysts say the uptick in remittances is a positive signal for Pakistan’s external account stability, especially amid ongoing efforts to secure foreign financing and improve foreign exchange reserves.

"Remittances are a critical non-debt source of foreign exchange for Pakistan," said a treasurer of a foreign bank. "The strong start to the fiscal year is encouraging and, if sustained, could ease pressure on the current account and support the rupee."

He added that seasonal factors such as Eid-related flows in July and improved remittance channels through official banking systems may have contributed to the rise.

The government has intensified efforts to promote formal remittance channels through incentives and digital platforms, a move seen as key to reducing reliance on informal money transfer systems and boosting dollar inflows through official means.

With global oil economies, particularly in the Gulf, remaining stable, the remittance outlook from expatriate labor markets remains optimistic. However, analysts caution that exchange rate volatility and potential macroeconomic shocks could still affect the trajectory in coming month