By Staff Reporter
KARACHI: Pakistan’s overseas workers sent home $3.656 billion in August, extending a run of double-digit gains that is helping cushion the country’s external accounts as it navigates a widening trade gap.
Remittances climbed 16.5% from a year earlier and 0.7% from July, the State Bank of Pakistan said on Wednesday. The increase builds on a record $41.6 billion collected in the fiscal year through June, positioning the current one for a similarly strong run.
For the first two months of the fiscal year that began in July, inflows totaled $7.3 billion, up 14.7% from $6.4 billion in the same period a year earlier. Topline Securities projects remittances will reach $43.7 billion for the full fiscal year.
Saudi Arabia remained the largest single source, with Pakistani workers there sending $873.5 million, a 19% jump from $737 million a year earlier, though the figure slipped 4% from July’s $914 million. The United Arab Emirates followed with $749.8 million, up 17% from a year earlier and 2% from the prior month.
Britain contributed $563.7 million, a 22% increase from a year earlier, while the U.S. added $308.9 million, up 16% year-on-year but down 2% from July. Remittances from European Union countries totaled $496 million, a 7% rise from July.
Combined, the two Gulf heavyweights accounted for more than $3.2 billion of the two-month total: Saudi Arabia contributed $1.79 billion, up 15% from a year earlier, and the UAE added $1.49 billion, a 14% increase. Other Gulf Cooperation Council countries brought in $327 million, up 8%, while remaining global corridors added $338 million, a 16% gain.
Khurram Schehzad, adviser to Pakistan’s finance minister, said the steady flows remain central to the country’s financial footing. “Sustained remittance flows remain an important pillar of Pakistan’s external account — supporting household incomes, FX liquidity, reserves and overall external-sector resilience,” he said in a social media post.
The Gulf region’s dominance in Pakistan’s remittance flows reflects the large expatriate workforce employed there, a pattern that has held for decades. That concentration, though, leaves inflows exposed to conditions in Gulf economies, where regional tensions have introduced a degree of uncertainty that could shape remittance trends in the months ahead.
Economists have also flagged a longer-running concern: that Pakistan’s growing dependence on remittances, while helpful in the near term, carries risks. Heavy reliance on such inflows can encourage import-driven growth and produce symptoms associated with Dutch disease, in which a surge of foreign currency inflates the local currency and undercuts other export sectors. Islamabad has sought to counter those risks by promoting formal banking channels for remittances through incentive programs designed to keep the flows steady and growing.
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