By Staff Reporter
ISLAMABAD: Prime Minister Shehbaz Sharif has decided to extend a critical remittance incentive scheme, directing the Ministry of Finance to release funds immediately to sustain a program that has driven overseas workers’ inflows to a record $38 billion in fiscal year 2024-25.
The move, announced Saturday, follows a warning from the State Bank of Pakistan’s Dr. Inayat Hussain that cutting subsidies to promote foreign remittances could push flows away from official banking channels. Remittances, which jumped 27% from $30.25 billion the previous year, have become a linchpin for Pakistan’s economy, supporting foreign exchange reserves and easing pressure on the current account.
“Overseas Pakistanis are our strength and a valuable asset of the country,” Sharif said in the statement. “The hard-earned remittances sent by overseas Pakistanis play a vital role in Pakistan’s development, and I, along with the entire nation, deeply value their contribution.”
The Workers’ Remittances Incentive Scheme, launched in 2023, encourages Pakistanis abroad to use formal banking channels over informal networks like hawala or hundi. It offers perks such as simplified digital transfers, priority processing, fee waivers, and reward points for frequent or high-volume senders. The program also ties into Roshan Digital Accounts (RDAs), enabling non-resident Pakistanis to invest in domestic stocks, real estate, and government securities.
Sharif highlighted the broader economic impact of the inflows. “These remittances not only helped in covering the rising import bill but also contributed to the increase in foreign exchange reserves.” The surge in FY2025 was instrumental in securing Pakistan’s first current account surplus in 14 years, a rare bright spot for a nation grappling with financial strains.
Remittances have long been a backbone of Pakistan’s economy, providing a steady source of foreign exchange and supporting millions of households. The funds boost disposable incomes, fueling spending on education, healthcare, and daily needs, while stimulating economic activity. In times of crisis, they’ve acted as a financial lifeline, stabilizing reserves and maintaining macroeconomic balance.
The prime minister pledged to streamline the system further. “We are removing obstacles in the way of remittances sent by hardworking overseas Pakistanis and making the system more effective, efficient, and user-friendly,” Sharif said. “From laborers to entrepreneurs, every overseas Pakistani is playing a part in the country’s progress.”
The decision to extend the scheme comes amid efforts to maintain the momentum of record inflows. SBP data showed remittances hit $38.3 billion in FY2024-25, the highest in Pakistan’s history, underscoring their outsized role in the external account. Sharif reiterated his commitment to overseas workers. “Their hard-earned remittances play a vital role in Pakistan’s development, and the entire nation, including myself, holds them in the highest regard.”
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