By Staff Reporter
KARACHI: Pakistan’s workers’ remittances surged to a monthly high of $3.6 billion in December, providing a vital boost to the country’s foreign-exchange reserves amid efforts to stabilize the economy under an International Monetary Fund bailout.
The inflows jumped 16.5% from a year earlier and rose 12.6% from November, the State Bank of Pakistan said in a statement on Friday. For the first half of the fiscal year through December, remittances climbed 10.6% to $19.7 billion from $17.8 billion a year ago.
The remittances, sent home by millions of Pakistanis working abroad, are a cornerstone of the country’s external accounts, helping finance imports, bolster household spending and ease pressure on the rupee. They’ve remained resilient despite global headwinds, with fiscal 2025 inflows hitting a record $38.3 billion, up sharply from $30.3 billion the previous year, driven by robust labor exports to Gulf nations and enhanced formal banking channels.
“Workers’ remittances recorded an inflow of $3.6 billion during December 2025,” the central bank said. “In terms of growth, remittances increased by 16.5 and 12.6% on y/y and m/m basis respectively.” “Cumulatively, with an inflow of $19.7 billion, workers’ remittances increased by 10.6% during H1FY26 compared to $17.8 billion received during the same period last year,” it added.
Saudi Arabia led the inflows with $813.1 million in December, up 6% from a year ago and 8% from November. The United Arab Emirates followed at $726.1 million, a 15% annual increase, with Dubai accounting for $566 million, Abu Dhabi $130 million, Sharjah $12.75 million and other locations $17.50 million.
The UK contributed $559.7 million, surging 28% year-on-year and 16% month-on-month, while the European Union sent $499 million, up 39% from a year earlier. Other Gulf Cooperation Council countries added $333 million, and the US provided $301.7 million, down 1% annually but up 9% from November.
Analysts at Topline Securities attributed the momentum to several factors, including elevated manpower exports in prior years, a narrowed gap between formal and informal exchange rates, and ongoing incentive programs. “Remittances growth momentum is continuing on the back of higher manpower exports in previous years, lower differential in formal and informal exchange market and continuation of remittances incentive package,” the brokerage said in a note. “We maintain our FY26 remittances target of $41 billion, up 7.5% from the FY25 level of $38 billion.”
The government has prioritized channeling remittances through official routes to enhance transparency and sustain growth. Since launching the Pakistan Remittance Initiative in 2009, the central bank has expanded its network: financial institutions tied to the program have grown from about 25 to more than 50 by 2024, encompassing conventional and Islamic banks, microfinance lenders and exchange companies.
Electronic money institutions can now receive funds via banks, and international partners have ballooned from around 45 to about 400. Remittances not only shore up reserves but also stimulate local activity and supplement incomes for dependent households, reducing the need for external loans. The inflows come as Islamabad adheres to IMF conditions under its current program, which emphasizes fiscal discipline and structural reforms to build buffers against shocks.
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