Ayesha Saba

Overseas employment and social lending continued to provide critical income support to Pakistani households during FY2026, with a steady rise in labour exports and expanded interest-free financing, according to the Monthly Economic Update and Outlook issued by the Finance Division.

Official data show that the Bureau of Emigration and Overseas Employment registered 76,207 workers for overseas employment in December 2025, representing an increase of 18.7 percent compared to 64,195 workers registered in December 2024. The monthly increase underscores the sustained demand for Pakistani labour abroad and reflects the continued role of overseas employment as a key source of household income and foreign exchange inflows.

On an annual basis, overseas employment also recorded growth. During calendar year 2025, a total of 762,499 Pakistani workers were registered for employment abroad, marking a 5.1 percent increase over the 725,672 workers registered in 2024. The rise indicates a gradual recovery in overseas labour markets and sustained opportunities for Pakistani workers, particularly in the Middle East.

The Finance Division noted that higher overseas employment has complemented robust remittance inflows during FY2026. Workers’ remittances rose by 10.6 percent to $19.7 billion during Jul–Dec FY2026, playing a vital role in supporting household consumption, stabilising the external account, and strengthening foreign exchange reserves.

Alongside overseas employment, social lending programmes continued to support low-income households and small economic activities. The Pakistan Poverty Alleviation Fund (PPAF), working in partnership with 26 organisations, disbursed 21,050 interest-free loans worth Rs1.36 billion during December 2025 alone. The loans were aimed at supporting income-generating activities, small businesses, and household needs, particularly among vulnerable segments of the population.

Cumulatively, since 2019, interest-free loans amounting to Rs122.8 billion have been provided to borrowers under PPAF-supported programmes. The sustained scale of lending highlights the growing role of interest-free finance in promoting financial inclusion and supporting livelihoods, especially in rural and underserved areas.

In addition to interest-free lending, government-backed social protection spending also remained significant during the first half of FY2026. Under the Benazir Income Support Programme (BISP), Rs144.9 billion was spent during Jul–Nov FY2026. Although slightly lower than the Rs156.7 billion spent in the same period last year, the expenditure reflects a continued fiscal commitment to social safety nets amid broader efforts to maintain fiscal discipline.

The Finance Division said that overseas employment and social protection initiatives together form an important pillar of income support and social resilience. Remittance-earning households benefit directly from labour exports, while interest-free loans and cash transfer programmes help stabilise incomes for families with limited access to formal credit.

According to the report, these income support channels have helped mitigate the impact of inflationary pressures on households, particularly during periods of economic adjustment. While inflation has eased during FY2026, maintaining income flows through employment and social programmes remains critical for sustaining consumption and reducing vulnerability.

The Finance Division highlighted that a continued focus on expanding overseas employment opportunities, strengthening skills development, and improving access to social finance will be important for supporting household incomes in the coming months. The report indicated that these measures complement broader macroeconomic stabilisation efforts by supporting domestic demand and social cohesion.

The combined growth in overseas employment registrations and sustained disbursement of interest-free loans during FY2026 underscores the role of labour mobility and social finance in strengthening household-level economic resilience, even as the broader economy navigates external and domestic challenges.

Credit: INP-WealthPk