UAE, Saudi Arabia drive record remittance growth for Pakistan

Saudi Arabia and the United Arab Emirates (UAE) have emerged as key drivers of Pakistan’s remittance surge, contributing 44% of total inflows in December, up from 41% a year earlier.

Workers’ remittances reached $3.1 billion in December, a 29.3% increase compared to the same month last year and a 5.6% rise from November, according to the State Bank of Pakistan.

During the first half of fiscal year 2024-25, remittances totaled $17.8 billion, reflecting a 32.8% growth compared to $13.4 billion in same duration last year.

Saudi Arabia led the inflows with $770.6 million, followed by the UAE at $631.5 million. Other significant contributions came from the United Kingdom with $456.9 million and the United States at $284.3 million.

The recent remittance growth reflects improved forex market sustainability and reduced exchange rate disparity, encouraging expatriates to remit funds through formal banking channels.

In 2023, Pakistan faced severe challenges with three parallel forex markets, causing the US dollar to soar to PKR 307 in the interbank market, PKR 333 in the open market, and as high as PKR 360 in the hawala-hundi market.

Experts highlight multiple factors fueling this growth, including a rise in overseas employment, improved remittance channels, and the stabilization of the dollar-rupee parity. The increasing share from Saudi Arabia and the UAE highlights the critical role these Gulf nations play in sustaining Pakistan’s economic stability.