PTBP Web Desk

the State Bank of Pakistan (SBP) has announced that overseas workers’ remittances surged to $3.08 billion in December 2024, marking a 6% increase from November’s $2.92 billion. This uptick reflects a robust 29.3% year-over-year growth, highlighting the vital role remittances play in supporting Pakistan’s economy.

The inflow of remittances in December not only showcases a month-on-month improvement but also a significant leap from the previous year. December 2023 saw remittances at $2.38 billion, making the 2024 figures an impressive 29.3% higher. Over the first half of the fiscal year 2024-25 (1HFY25), remittances have surged by 33%, totaling $17.8 billion compared to $13.4 billion in the same period of the previous fiscal year (1HFY24).

Remittances are a cornerstone of Pakistan’s external account, providing substantial support to the national economy. They not only stimulate economic activities but also significantly increase the disposable income for many households dependent on these funds. This financial inflow is crucial for maintaining the balance of payments and supports the Pakistani rupee’s stability against foreign currencies.

Finance Minister Muhammad Aurangzeb has optimistically projected that the total remittance for the fiscal year 2024-25 could reach an unprecedented $35 billion, a significant increase from the $30.25 billion recorded in FY24. This forecast is echoed by SBP Governor Jameel Ahmad, who believes that achieving this target is well within reach, thanks to the ongoing positive trends and policy measures aimed at facilitating remittances.

Country-wise Breakdown

• Saudi Arabia: Leading the pack, Saudi Arabia contributed $770.6 million in December 2024, a 6% increase from November and a 33% jump from December 2023. This growth underscores the strong economic ties and the substantial Pakistani expatriate community in Saudi Arabia.
• United Arab Emirates (UAE): With a slight monthly increase of 2%, remittances from the UAE reached $631.5 million in December. However, on a yearly comparison, this represents a dramatic 51% increase, reflecting enhanced economic activities and possibly new remittance-friendly policies.
• United Kingdom: The UK saw an 11% month-over-month increase in remittances, totaling $456.9 million in December 2024 compared to November. Year-over-year, this is a 24% rise, suggesting a recovery or growth in the UK job market for Pakistani workers.
• European Union: From the EU, remittances rose by 11% to $360.3 million in December, indicating a healthy economic environment for Pakistani expatriates in Europe.
• United States: Contrarily, the US experienced a slight decrease in remittances by 1% to $284.3 million in December from November, which could be attributed to various economic factors or shifts in remittance patterns.

The consistent growth in remittances suggests a positive outlook for Pakistan’s economic stability. The government’s initiatives to encourage remittances through formal channels, including digital platforms, and the crackdown on illegal money transfer systems like hawala/hundi, have begun to yield results. Additionally, the projected increase in remittances aligns with broader economic reforms and international collaborations aimed at boosting Pakistan’s economic resilience.