Remittances show stunning growth in February

Data released from the State Bank of Pakistan (SBP) has revealed that remittance inflows have displayed robust Year on Year (YoY) growth, resulting in remittances surging to $3.12 billion in February 2025. 

As per credible reports, remittances have grown by a staggering 40 percent as Pakistani expatriate workers sent in much needed cash to the economy. On a Month on Month (MoM) basis, remittance inflows reportedly grew by a respectable 3.8 percent compared to January 2025.

The numbers spell great news for cash-strapped Pakistan where importers have historically faced problems associated with a lack of liquidity. Moreover, the rise in remittances is expected to reduce pressures on the SBP’s foreign currency reserves.

Historically, Pakistan has run a trade deficit with its trading partners, causing the rupee to depreciate. However, growth in remittances in recent times has allowed the rupee to stabilize which has lent support to the economy – as it has created a more stable environment for businesses to make transactions.

As per SBP data, remittances climbed up to a whopping $23.97 billion during the first eight months of Fiscal Year (FY) 2024-25. Analysts have outlined the stark improvement in remittances the economy has experienced as remittances grew by 32.5 percent compared to the first eight months of FY 2023-24.

The surge in remittances can be attributed to a rise in rising immigration levels - as a growing number Pakistanis have lost faith in the economy. While analysts highlight the costs associated with brain drain, some consider it to be positive for the country.

There is a significant time lag associated with raising funds for investments and laying out infrastructure to generate employment in the country. However, these issues become irrelevant when Pakistanis are seeking employment elsewhere.

Many believe that remittance inflows could balloon in the near future as the federal government recently initiated a plan to help workers move abroad by providing them with loans and other facilities. These workers are likely to move to the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) – as these are the primary destinations for expatriate workers.

As per reports, remittances from the KSA, during the first eight months of FY 2024-25, stood at a respectable $5.86 billion after posting a growth rate of 34.6 percent. Similarly, remittance inflows from the UAE sat close to $5 billion after experiencing an astronomical growth of 55.7 percent.

Data reveals that approximately $6 billion poured in from the United States (USA) and United Kingdom (UK) as well. The data is consistent by historical trends as the USA and UK have lagged far behind in remittance inflows received from Gulf countries.