By Moaaz Manzoor

Workers’ remittances surged 20.2 per cent month-on-month to $4.251 billion in May 2026, boosting the country’s non-debt foreign exchange inflows, according to data released by the State Bank of Pakistan.

The inflows were the highest in the recent six-month period and were led mainly by Saudi Arabia, the United Arab Emirates, the United Kingdom and other Gulf countries.

The SBP data showed that remittances increased by $714.41 million in May compared with $3.537 billion in April 2026. On a year-on-year basis, remittances rose 15.4 per cent from $3.7 billion in May 2025.

Cumulative workers’ remittances reached $38.1 billion during July-May FY26, compared with $34.9 billion in the same period of FY25. This shows that overseas Pakistani workers continued to play a critical role in supporting the external account, household income and foreign exchange liquidity.

Saudi Arabia remained the largest source of remittances in May, with inflows rising to $1.025 billion from $841.60 million in April. The UAE followed closely, with remittances increasing to $1.006 billion from $734.42 million a month earlier.

Together, Saudi Arabia and the UAE contributed $2.032 billion in May, accounting for 48 per cent of total remittance inflows. As a whole, the Gulf region contributed $2.424 billion, or 57 per cent of total remittances during the month.

Within the UAE, Dubai remained the major contributor with $828.13 million, while Abu Dhabi contributed $158.21 million. Among other GCC countries, Oman contributed $133.23 million, followed by Qatar at $118.62 million, Kuwait at $83.74 million and Bahrain at $57.11 million.

The United Kingdom also remained a major source of inflows, with remittances rising to $645.49 million in May from $563.58 million in April. Remittances from the United States increased to $349.83 million from $317.27 million in April.

Inflows from the European Union countries stood at $465.80 million in May, compared with $432.15 million in April. Within the EU, Italy contributed $135.54 million, followed by Spain at $83 million, Germany at $71.44 million, Greece at $50.54 million and France at $49.19 million.

Among other important sources, Australia contributed $106.70 million, Canada $79.62 million, South Africa $32.40 million, Malaysia $18 million, Norway $14.98 million, South Korea $9.77 million and Japan $7.58 million.

The SBP data showed that total remittances stood at $3.592 billion in December 2025, $3.464 billion in January 2026, $3.288 billion in February, $3.831 billion in March, $3.537 billion in April and $4.251 billion in May.

The May jump is important for Pakistan because remittances are a non-debt-creating foreign exchange. Strong inflows help finance the current account, support the rupee and reduce pressure on official reserves at a time when external payments remain a key challenge for the economy.

The data also shows Pakistan’s continued dependence on Gulf labour markets, especially Saudi Arabia and the UAE, for remittance inflows. Sustaining formal remittance channels will remain important for external stability, particularly as Pakistan manages import payments, debt servicing and reserve requirements.

Credit: INP-WealthPk