By Abdul Ghani

Workers' remittances increased by 8.2% to $30.3 billion in FY2025-26, providing critical support to Pakistan's external sector and helping strengthen the country's foreign exchange position amid continued global economic uncertainty, according to the Pakistan Economic Survey 2025-26 released by the Ministry of Finance.

The survey highlights remittances as a primary pillar of Pakistan's economy, contributing significantly to household incomes, foreign exchange reserves and external sector stability.

According to the survey, overseas Pakistanis continued to play a vital role in supporting the national economy by sending higher inflows through formal channels during the fiscal year. The increase came despite economic challenges faced by several major host countries and ongoing geopolitical uncertainties in different regions.

The Ministry of Finance notes that remittances remained a key factor in maintaining balance in the country's external account and reducing pressures arising from imports and external financing requirements.

The survey shows that the growth in remittances contributed to the relative stability of Pakistan's current account during FY2025-26. Strong inflows helped offset pressures from the trade deficit and supported foreign exchange availability in the economy.

According to the report, the external sector demonstrated considerable resilience during the fiscal year. While imports increased alongside economic recovery and higher domestic demand, remittances and services exports provided important support to external balances.

The survey notes that the country's current account remained broadly balanced during the fiscal year, supported primarily by workers' remittances and growing export earnings from the services sector, particularly information technology.

Saudi Arabia remained the largest source of remittances to Pakistan during FY2025-26. The survey shows that Pakistani workers in the Kingdom continued to contribute the highest share of total inflows, reflecting the large Pakistani expatriate community employed there.

The United Arab Emirates remained another major contributor, while significant inflows also originated from the United Kingdom, the United States and other Gulf Cooperation Council countries.

According to the survey, the government's efforts to encourage the use of formal banking channels continued to support remittance growth. Improvements in digital banking, financial inclusion and payment systems have made it easier for overseas Pakistanis to transfer funds through regulated channels.

The report highlights the growing role of technology in facilitating remittance transactions. Digital financial services and banking reforms have helped improve transaction efficiency, reduce transfer costs and enhance accessibility for recipients across the country.

Remittances remain particularly important for millions of households that rely on overseas earnings to meet daily expenses, finance education, support healthcare and invest in housing and small businesses.

The survey notes that remittance inflows contribute directly to household consumption and indirectly support economic activity across multiple sectors, including retail trade, construction, transportation and financial services.

According to the Ministry of Finance, strong remittance performance also helped strengthen foreign exchange reserves during FY2025-26. Improved reserve levels enhanced the country's external resilience and supported confidence in macroeconomic stability.

The survey further highlights that remittances have consistently remained one of Pakistan's largest sources of foreign exchange earnings, often exceeding inflows from several major export sectors.

At a time when many developing countries continue to face external financing challenges, Pakistan benefited from the continued support of its overseas workforce, which remains a valuable economic asset.

The report notes that labour migration and overseas employment continue to contribute significantly to the economy. Programmes aimed at enhancing vocational training, skills development and overseas employment opportunities are expected to support future remittance growth.

The survey also points to ongoing efforts to improve workforce skills and increase the competitiveness of Pakistani workers in international labour markets. These initiatives are intended to enhance earning potential abroad and strengthen long-term remittance inflows.

With remittances reaching $30.3 billion during FY2025-26, overseas Pakistanis once again emerged as a major source of economic support, helping strengthen external sector stability, support household incomes and contribute to the country's broader economic resilience.

Credit: INP-WealthPk