KARACHI:

Workers’ remittances sent by overseas Pakistanis declined on a month-on-month basis in February, though inflows remained above the $3 billion mark, with the United Arab Emirates (UAE) emerging as the largest source of remittances during the month, overtaking Saudi Arabia, which has traditionally been Pakistan’s top remittance corridor.

According to data released by the State Bank of Pakistan (SBP), remittances amounted to $3.29 billion in February 2026, down about 5% compared to $3.46 billion recorded in January. However, inflows were 5.2% higher than the $3.13 billion received in February 2025, reflecting continued resilience in remittances despite the monthly decline. Country-wise data shows that the UAE contributed the largest share of inflows during February, sending $696.2 million, slightly ahead of Saudi Arabia with $685.5 million. The shift in ranking is notable as Saudi Arabia has historically remained Pakistan’s biggest remittance source.

Within the UAE, Dubai accounted for the bulk of inflows at $566.2 million, followed by Abu Dhabi with $101.9 million, while remittances from Sharjah and other emirates made up the remainder.

Remittances from the United Kingdom stood at $532 million, making it the third-largest source, while inflows from the United States reached $319.5 million during the month.

Meanwhile, remittances from other Gulf Cooperation Council (GCC) countries totalled $317.2 million, including Qatar with $102.8 million, Oman with $92.6 million, Kuwait with $77 million, and Bahrain with $44.8 million.

Commenting on the trend, Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP), said rising labour demand and migration trends were key factors behind the strong remittance flows from the UAE. He noted that Dubai is currently witnessing a surge in construction, real estate and development activity, which has increased demand for foreign labour, including workers from Pakistan.

Paracha said the emirate is also a global financial and business hub attracting investors and professionals from around the world. “Dubai is a financial hub for the whole world, Europeans, Russians, Chinese and others are investing there, so there is demand for all types of services and businesses,” he said.

According to him, increased migration of Pakistanis, including businessmen, entrepreneurs and professionals such as doctors, lawyers and accountants, owing to the bad economy at home, has also contributed to higher remittance flows from the UAE.

He added that Saudi Arabia’s relatively stricter labour policies, including localisation rules aimed at increasing employment for Saudi nationals, may also be influencing remittance patterns. “In Saudi Arabia, businesses are required to hire local workers under specific quotas, whereas Dubai does not have such restrictions, which makes it easier for foreign workers and businesses to operate,” Paracha explained.

Despite the strong inflows, he cautioned that ongoing geopolitical tensions in the Middle East could affect remittance flows and global trade if the situation persists. Ramazan is usually the peak period for remittances because people send money for Eid expenses and charity. “If tensions escalate further, it could have an impact,” he said. Sana Tawfiq, Head of Research at Arif Habib Limited (AHL), said remittances are expected to increase next month due to seasonal factors.

She added that geopolitical tensions in the Middle East may also lead expatriates in Gulf countries to send additional funds to support their families, potentially boosting inflows. Tawfiq noted that the State Bank of Pakistan has set a remittance target of $42 billion for the current fiscal year, which appears achievable given current trends. “Current projections suggest remittances could exceed $40 billion this year,” she said.

According to her, strong remittance inflows will continue to provide critical support to Pakistan’s external account, helping offset pressure from rising oil prices and a higher import bill. However, she said Pakistan is still expected to post a current account deficit of around or slightly below $2 billion for the year, noting that the deficit during the first six months of the fiscal year stood at approximately $1.17 billion. The rupee inched up Rs0.01 against the US dollar in the interbank market, closing at 279.36. Meanwhile, gold prices in Pakistan per tola increased by Rs6,200 to Rs539,562, according to the All-Pakistan Gems and Jewellers Sarafa Association.