Pakistan sees 25.2% surge in workers' remittances in January

Pakistan experienced a notable increase in workers' remittances in January 2025, with inflows reaching $3.0 billion, marking a 25.2% growth compared to the same period in 2024, according to official data.

The main contributors to the remittances in January 2025 were Saudi Arabia, with $728.3 million, the United Arab Emirates with $621.7 million, the United Kingdom with $443.6 million, and the United States with $298.5 million.

In the first seven months of the current fiscal year, the cumulative inflow of remittances totaled $20.8 billion, a significant 31.7% rise from $15.8 billion recorded during the same period in the previous fiscal year. Out of $20.8 billion, about 61% of the funds from Saudi Arabia, UAE and UK amounting to $5.1 billion, $4.3 billion and $3 billion respectively, the data said.

The main contributors to the remittances in January 2025 were Saudi Arabia, with $728.3 million, the United Arab Emirates with $621.7 million, the United Kingdom with $443.6 million, and the United States with $298.5 million.

Remittances remain a crucial pillar of Pakistan's external account. The encouraging increase can be attributed to improving macroeconomic conditions and the stability of the Pakistani rupee (PKR). Estimates suggest that remittances could total $36.6 billion in FY25.

The economic outlook is further supported by declining interest rates to 12% and the resolution of a backlog of dividend payments. As a result, the primary deficit, which surged by 56% YoY in FY24, is anticipated to normalize in FY25.

Key factors driving the improvement in remittances include the stability of the PKR against the US dollar and the narrowing spread between interbank and open market exchange rates. These developments make it more appealing for remittance senders to use formal channels, further boosting inflows to the country.