In February 2025, Pakistan reported a 38.6% increase in remittances, reaching $3.1 billion, driven mainly by contributions from Saudi Arabia and the UAE. The significant inflows are crucial for maintaining the country’s foreign exchange reserves and balance of payments, highlighting the importance of overseas support amid rising domestic inflation.
In February 2025, Pakistan experienced a significant year-on-year growth of 38.6 percent in remittances, amounting to $3.1 billion, as reported by the central bank. The primary sources of these inflows were Saudi Arabia and the UAE, which are crucial for Pakistan’s economy, aiding in stabilizing foreign exchange reserves and supporting the balance of payments.
The State Bank of Pakistan (SBP) confirmed that in February, the country predominantly received remittances from Saudi Arabia, totaling $744.4 million. The UAE followed with contributions of $652.2 million. Contributions from the United Kingdom and the United States were $501.8 million and $309.4 million, respectively. This robust inflow underscores the critical financial support from abroad.
Furthermore, cumulative remittances during the period from July to February of FY25 reached $24 billion, reflecting an increase of 32.5 percent compared to $18.1 billion during the same period in FY24. Several factors contributed to this surge, including reforms to reduce illegal foreign exchange trading and incentives offered by the State Bank.
Additionally, decreasing global inflation rates have encouraged Pakistani migrants to remit more funds back home. Increasing inflation within Pakistan has also led families to rely more heavily on financial assistance from relatives abroad, reinforcing the importance of remittances in the country’s economic landscape.
The rise in remittances plays a vital role in supporting Pakistan’s economy, providing significant contributions from Saudi Arabia and the UAE. As financial support from overseas increases, due to various economic factors, Pakistan’s reliance on these funds indicates their importance in stabilizing the country’s financial situation. The government initiatives promoting legal channels for remittances have effectively influenced the growth of these inflows.
Original Source: www.arabnews.com
