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KARACHI:
Despite the absence of structured educational, training or welfare support, remittances sent by Pakistani workers hit a record $41.58 billion through formal banking channels during FY2025-26, providing a vital cushion to the country’s external account.
According to provisional data released by the State Bank of Pakistan (SBP), inflows rose 8.6% in fiscal year 2026 from $38.30 billion in FY2025, adding nearly $3.29 billion. The strong performance came despite geopolitical tensions and conflicts in parts of the Middle East, where a large share of Pakistan’s overseas workforce is employed. Remittances helped strengthen foreign exchange reserves, ease pressure on the current account and contribute to several monthly surpluses. Monthly inflows averaged $3.465 billion, with June recording $3.475 billion, up 2% from the previous year but down from May’s peak of $4.25 billion.
Shifting patterns
Saudi Arabia remained the largest source with $9.783 billion (+4.7%), followed by the UAE at $8.807 billion (+12.5%), where Dubai contributed $6.765 billion. The United Kingdom sent $6.326 billion (+7.1%), while EU countries posted the fastest growth at $5.227 billion (+15%). Other GCC countries added $3.934 billion (+6%). In contrast, inflows from the United States declined marginally by about 2.6% to $3.624 billion.
The growth reflects greater use of formal channels, improved digital payment systems and steady demand for Pakistani labour, particularly in the Gulf. Banking expert Ibrahim Amin attributed the rise to expanding overseas employment and fintech-driven convenience. “Collaborative efforts by banks, exchange companies and fintech operators have made remittances faster and safer,” he noted. Technology expert Saad Shah highlighted opportunities in Saudi Arabia’s development projects, where Pakistani IT professionals and skilled workers are finding new roles. “Saudi economic diversification is creating demand in tech, construction, engineering and healthcare,” he said, forecasting further gains if Pakistan aligns workforce skills with international needs.
Critical gaps in policy and welfare
Yet this remarkable contribution comes with glaring shortcomings at home. Successive governments have failed to devise a structured, long-term plan for overseas workers, who leave primarily due to a lack of decent opportunities at home. There is no comprehensive, targeted education and vocational training programme designed to equip workers with skills demanded by host markets, leaving many in low-paying, high-risk blue-collar jobs.
Authorities appear equally indifferent to the welfare of these workers and their eventual return. While expats endure hardships abroad to support their families and the national economy, there is little planning for their reintegration. No robust welfare framework exists to support returning migrants with skills recognition, job placement, housing support or financial literacy programmes that could help them invest their savings productively.
Critics argue that remittances are largely being used to finance the persistent trade deficit rather than build a self-sustaining economy. Instead of channelling this foreign exchange into productive investments, such as export-oriented industries, SME development or human capital formation, the inflows often support consumption and import bills. This offers short-term relief but does little to improve long-term productivity or uplift the lives of ordinary citizens who remain trapped in low-growth cycles.
Pakistan possesses significant untapped potential. Experts like Amin stress the need for deeper engagement with the diaspora, expanded banking partnerships in the Gulf and stronger coordination between diplomatic missions, employment promoters, regulators and welfare organisations. Shah echoed this by calling for a national human resource strategy to match training with global labour demands.
Without such measures, Pakistan risks continuing to export its manpower as a stopgap solution while failing to create an enabling environment at home. The record $41.6 billion inflow reaffirms the resilience of overseas Pakistanis, but it also underscores the urgent need for visionary policymaking. Future growth will depend not just on sending more workers abroad, but on treating their contributions as a catalyst for genuine structural reforms.
SBP foreign exchange reserves increased by $1.94 billion during the week ended July 3, 2026, reaching $18.47 billion, mainly driven by government inflows. Total liquid foreign reserves crossed $23.98 billion as of July 3, 2026, including $18.47 billion held by the SBP and $5.52 billion in net reserves held by commercial banks. The rupee stood at Rs278.06 per dollar on Thursday in the interbank, showing Rs0.01 change from Rs278.07 the previous day.
Gold prices in Pakistan rose on Thursday, tracking international gains. The price per tola increased by Rs3,600 to Rs433,836, while 10-gram gold rose Rs3,086 to Rs371,944, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Internationally, gold gained $36 per ounce to $4,114. Silver remained unchanged at Rs6,421 per tola.