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Pakistan received $2.92 billion in remittances from overseas workers in November 2024, marking a 4.5% decrease compared to $3.05 billion in October 2024, according to data released by the State Bank of Pakistan (SBP) on Monday. However, on an annual basis, remittances saw a significant increase of 29.1% compared to $2.26 billion in November 2023. For the first five months of FY25 (5MFY25), remittances totaled $14.8 billion, reflecting a 33.6% year-on-year rise compared to $11.1 billion during the same period in FY24. Remittances are a key component of Pakistan’s economy, bolstering its external account, driving economic activity, and increasing the disposable incomes of households reliant on these funds. Finance Minister Muhammad Aurangzeb recently predicted that remittance inflows could reach a record $35 billion for FY25, up from $30.25 billion recorded in FY24. Breakdown of November Remittances Saudi Arabia: Overseas Pakistanis sent $729.2 million, a 5% month-on-month decline. However, this represents a 34% year-on-year increase from $543.6 million in November 2023. United Arab Emirates (UAE): Inflows were marginally lower by 0.25% month-on-month,dropping from $620.9 million in October to $619.4 million in November. On a yearly basis, inflows surged by over 50% from $411.8 million in November 2023. United Kingdom: Remittances fell by 4.6% month-on-month to $409.9 million in November but increased 20% year-on-year. European Union: Inflows dropped by 10% month-on-month to $323.1 million in November, compared to $359.1 million in October 2024. United States: Remittances amounted to $288.2 million, marking a 4.3% month-on-month decline. SBP’s Measures to Boost Remittances In October 2024, the SBP introduced a revamped incentive structure for banks and Exchange Companies (ECs) to increase remittance inflows. The new system offers Fixed Component Incentives and Variable Component Incentives to these institutions, encouraging better performance in attracting remittances.

Pakistan Receives Record $3 Billion in Remittances for October 2024 KARACHI: Pakistan received a significant boost in remittances, surpassing $3 billion in October 2024, marking the highest monthly inflow so far in the current fiscal year (FY25), according to a report from the State Bank of Pakistan (SBP) released on Friday. The October figures highlight a continued upward trend in remittance inflows, which grew by 6.7% compared to September 2024. Overseas Pakistanis sent home $3.1 billion in October, up from $2.86 billion in September, a jump of $192 million. This also represents a notable year-on-year increase of 24%, compared to the $2.46 billion remitted in October 2023. The largest contributions came from key countries, with Saudi Arabia leading at $766.7 million, followed by the United Arab Emirates at $620.9 million, the United Kingdom at $429.5 million, and the United States at $299.3 million, according to the SBP report. Over the four-month period from July to October 2024, total remittances amounted to $11.8 billion, a 34.7% increase from the $8.8 billion received during the same period last year. This surge underscores the growing role of remittances in supporting Pakistan’s foreign exchange reserves and contributing to overall economic stability. The most significant growth was seen in remittances from Saudi Arabia, which rose by 37% to $2.9 billion in the first four months of FY25. Saudi Arabia now accounts for about 25% of Pakistan’s total remittance inflows for the year. Additionally, remittances from the United States grew by 14% to $1.14 billion, while inflows from the United Kingdom surged by 39% to $1.7 billion. The UAE saw a remarkable 56% increase, with total remittances reaching $2.3 billion. SBP Governor Jameel Ahmed has forecast that remittance inflows will continue to rise and is expected to reach around $34 billion by the end of FY25. Banking sector analyst Ibrahim Amin predicts that the coming months will see further growth in remittances, particularly from Gulf countries, thanks to the SBP’s partnership with the Buna payment system. He noted that the influx of both blue-collar workers and white-collar professionals seeking better job opportunities in the Gulf will contribute to this positive trend. Amin also suggested that to maximize remittance inflows, the government, diplomatic missions, banks, and overseas organizations should focus on raising awareness of new services available to overseas workers, which could enhance remittance channels and increase the volume of funds being sent home.

First, remittances increased by 38.8 percent in July-September 2025 compared to the same period the previous year. This growth is primarily attributed to the government’s decision to discontinue its problematic foreign exchange market interventions. However, it’s worth noting that remittance growth slowed to 29 percent in September 2025 compared to September 2024, suggesting these inflows may be reaching their peak. Second, the country achieved a current account surplus, which reports suggest resulted more from delays in opening letters of credit than from increased exports, although raw material imports have been facilitated to support domestic production. Exports rose by 8.5 percent, but this was outpaced by imports, which climbed 19.4 percent, indicating critical raw material inflows. This contributed to a slight reduction in the decline of the large-scale manufacturing sector (LSM), which recorded a 0.19 percent drop in July-August compared to a negative 2.53 percent in the same period last year. However, concerningly, the LSM figure for August 2025 was negative 2.65 percent, down from a positive 0.21 percent in August 2024. Third, there was a significant 32.7 percent increase in Federal Board of Revenue collections in September compared to the same month last year, and a 25.5 percent rise for July-August this year over the same months last year. Nevertheless, the target was set unrealistically high at 40 percent above previous levels, as agreed with the International Monetary Fund (IMF). This raises concerns that the government may need to activate contingency plans in the event of revenue shortfalls, which could lead to increased reliance on indirect taxes (currently around 75-80 percent). These taxes disproportionately affect the poor, contributing to a 21 percent drop in electricity consumption and a notable rise in crime. Despite these challenges, the government appears committed to achieving its budgeted revenue goals by enforcing measures to broaden the tax base. However, significant obstacles remain, including (i) a decline in the discount rate by 5.5 percent, yet private sector credit has continued to shrink, with a negative 240.9 billion rupees recorded from July 11 to October this year, compared to a negative 247.8 billion rupees during the same period last year. This suggests the projected 3.5 percent growth needed for robust tax collections is unlikely to be achieved; and (ii) ongoing resistance from traders and industrialists against measures implemented by the Federal Board of Revenue (FBR). Finally, inflation has significantly decreased to single digits. However, this drop must be viewed in context, considering the 21 percent decline in electricity demand due to higher rates and a substantial increase in petroleum levy collections, which surged by 19.6 percent. This has further diminished the purchasing power of citizens, amid a poverty level of 41 percent that rivals that of Sub-Saharan Africa. The report does not disclose three critical indicators. First, while it mentions that the country’s debt has decreased, it also notes that mark-up expenditures fell by 6.3 percent due to a gradual reduction in the policy rate, which lowered the fiscal deficit to 0.7 percent of GDP, down from 0.8 percent last year. Second, the poorly managed energy sector remains burdened by flawed policies, contributing to an estimated 2.6 trillion rupees in circular debt. These policies include promoting solar panels, which have decreased demand from the national grid and increased tariffs due to rising capacity payments, as well as a focus on privatization without learning from past mistakes, such as with K-Electric, which still requires a 171 billion rupee tariff equalization subsidy. Lastly, while total current expenditure grew by 3.1 percent from July to August 2025, amounting to 16,635.5 billion rupees compared to 15,585.7 billion rupees in the same period last year, a complete picture remains elusive. In summary, significant work lies ahead to effectively set the economy on a stable path.

In the first quarter of fiscal year 2025, overseas Pakistanis sent a total of $8.8 billion back to Pakistan, marking a significant increase of 38.8% compared to the same period in fiscal year 2024. Overseas Pakistanis sent an impressive $2.849 billion back to Pakistan in September 2024, reflecting a notable 29% increase from $2.208 billion in the Septermber 2023, Express News reported. Despite this positive trend, remittances saw a slight decline of 3% compared to August 2024, when the total was $2.943 billion. The average monthly remittances from workers over the three months amounted to approximately $2.92 billion. Pakistani workers in Saudi Arabia were the largest contributors in September 2024, sending $681.3 million. Although this figure is a 4% decrease from August, it still represents a 27% increase from the $538.3 million sent in September of the previous year. In contrast, remittances from the UAE showed an upward trend, rising by 4% from August, from $538.4 million to $560.3 million. Year-on-year, this figure jumped significantly by 40%, compared to $399.8 million in September 2023. Pakistani workers in the United Kingdom sent $423.6 million in September 2024, which was an 11% decrease from August. However, this amount still signifies a 36% increase compared to last year. Remittances from the European Union saw a slight decline of 3% from August, totalling $365.3 million in September 2024. Lastly, remittances from Pakistanis in the United States amounted to $274.9 million in September, marking a 15% drop from the previous month.  An additional $860 million was sent from other Gulf countries. Notably, the amount sent by overseas Pakistanis in the first quarter has exceeded the funds provided by the IMF under its three-year programme.

As of August 2024, Pakistan has received a total of $8.581 billion in gross inflows through the Roshan Digital Account (RDA), according to data from the State Bank of Pakistan (SBP) released on Wednesday. Inflows through RDAs saw a modest rise, reaching $165 million in August, up from $161 million in the previous month. The primary goal of RDAs is to attract foreign currency deposits, providing a stable funding source for the country. These inflows help bolster foreign exchange reserves and support foreign debt repayments, contributing to the strengthening of the Pakistani rupee against the U.S. dollar. By September 6, the SBP’s foreign exchange reserves had reached $9.47 billion. Of the total $8.581 billion received between September 2020 and August 2024, $1.646 billion has been repatriated, while $5.441 billion has been utilized within the country. As a result, net repatriable liabilities stood at $1.494 billion. Through RDAs, non-resident Pakistanis can conveniently open bank accounts in Pakistan from anywhere in the world. These accounts allow them to send investments and remittances in both international and local currencies. Once the account is approved, users can invest in both conventional and Islamic Naya Pakistan Certificates, which are government-issued. Additionally, RDAs provide access to Islamic savings and term products offered by banks, as well as the local stock market. SBP data shows that between September 2020 and August 2024, net investments through RDAs amounted to $1.495 billion. Of this, $370 million was invested in conventional Naya Pakistan Certificates, while $638 million was directed toward Islamic NPCs. Furthermore, $33 million was invested in the stock market, and other liabilities accounted for $32 million. Net repatriable liabilities totaled $1.495 billion, with the account balance standing at $412 million.

The State Bank of Pakistan (SBP) has proposed performance-based incentives for banks and exchange companies to boost remittance inflows through formal banking channels. According to sources, during a recent Economic Coordination Committee (ECC) meeting, the SBP’s deputy governor emphasized the need to shift from the current transaction-based incentives to a performance-driven approach. Previously, banks received 30 Saudi Riyal (SAR) for every $100 transaction. The SBP now proposes reducing this base incentive to 20 SAR per $100 transaction. Additionally, banks would receive an extra 8 SAR per incremental transaction if they achieve a growth of up to 10% or $100 million compared to the previous year, whichever is lower. For growth beyond 10% or $100 million, a further 7 SAR would be provided. Concerns were raised during the meeting about whether a cost-benefit analysis had been performed, as the scheme could have significant financial consequences for the government. The SBP clarified that the existing scheme has successfully increased remittance inflows, bringing in nearly $30 billion annually. The proposed reduction in the base rate from 30 SAR to 20 SAR would also reduce the government’s overall Telegraphic Transfer (TT) charges. The SBP also outlined additional proposed revisions for exchange companies. The Finance Division informed the committee that the government, through the SBP and the Pakistan Remittance Initiative (PRI), has introduced various schemes to promote remittances via formal channels. These schemes were revised in 2023, resulting in steady growth in remittances. In FY 2024, remittances saw a 10.7% year-on-year increase, totalling $30.3 billion, compared to $27.3 billion in FY 2023. SBP has proposed further revisions to two Home Remittance Incentive Schemes, which were originally approved by the ECC/Cabinet and now require ECC approval for the proposed updates. Reimbursement of TT Charges This scheme, introduced in 1985, aims to provide remittance transactions at zero cost for both senders and receivers in Pakistan for transactions exceeding $100. Banks and financial institutions involved receive a uniform incentive for eligible transactions. The incentive rate was raised to 30 SAR last year, leading to positive growth in remittances. Now, SBP proposes splitting the flat 30 SAR reimbursement into fixed and variable components. The fixed component would provide 20 SAR for all eligible transactions over $100. The variable component would offer an additional 8 SAR per incremental transaction for growth up to 10% or $100 million, whichever is lower. For growth exceeding 10% or $100 million, an additional 7 SAR would be provided. Banks achieving higher remittance inflows could earn up to 35 SAR per transaction, with performance reviewed monthly and adjustments made in the last quarter of the financial year. SBP believes these changes will encourage banks to drive remittance inflows while potentially reducing the government’s TT charges. Incentive Scheme for Exchange Companies Introduced in 2022, this scheme incentivizes exchange companies (EC) to surrender 100% of their foreign exchange to the interbank market. Currently, exchange companies receive Rs1 per USD mobilized. The SBP proposes increasing the base rate to Rs2 per USD surrendered to SBP-designated banks. A variable component would also be introduced, offering Rs3 per USD for incremental remittances up to 5% or $25 million, whichever is lower, and Rs4 per USD for growth beyond 5% or $25 million. Payments would be based on surrendering foreign exchange in line with SBP’s prescribed percentages, with performance evaluated monthly and adjustments made in the last quarter of the financial year. SBP argues that these revisions will incentivize exchange companies to mobilize more remittances and help offset their increased operating costs. ECC Approval The ECC reviewed the Finance Division’s summary on the “Proposal for Revision in Home Remittances Incentive Schemes” and approved SBP’s proposed changes to both the TT Charges Scheme and the Incentive Scheme for Exchange Companies.

In August 2024, the country recorded a significant increase in remittances, reaching $2.94 billion, the year-on-year growth stood at 40.5 percent. This surge is largely attributed to overseas Pakistani workers sending money back home, particularly from major markets like Saudi Arabia, the UAE, the UK, and the USA. With remittances being a crucial pillar for Pakistan’s economy, this influx has played a critical role in supporting the country’s foreign exchange reserves. The rise in remittances was also much needed, particularly amid normalizing repatriation outflows. The cumulative inflows for the first two months of the fiscal year (2MFY25) witnessed a growth of 44 percent year-on-year with significant growth seen flows from the UAE, KSA and the GCC world. This heightened monthly trend has continued over the last three consecutive months as employment opportunities in Middle Eastern countries like Saudi Arabia and the UAE have improved, with an increasing number of Pakistanis finding work in these regions. Moreover, the government and the State Bank of Pakistan (SBP) have also introduced policies to encourage the use of formal channels for sending remittances. Incentives for banks and exchange companies to attract more inflows, especially from blue collar workers, have been part of this push. To ensure that the remittance inflows remain robust, it is essential for Pakistan to continue strengthening formal remittance channels and maintaining a competitive exchange rate. In the longer term, maintaining stable economic policies and enhancing incentives for formal remittance channels will be key to securing a sustainable inflow of remittances.

During the launch of BYD’s new venture in Pakistan, Finance Minister Muhammad Aurangzeb announced a strategic plan aimed at achieving economic stability through private sector investments, export-oriented growth, and foreign direct investment (FDI). BYD, a leading Chinese electric vehicle (EV) manufacturer, has partnered with Mega Motor Company—a division of Hubco, Pakistan’s first Independent Power Producer—to establish a factory in Karachi. The decision to set up a plant in Pakistan is notable. It reflects either the success of Pakistani stakeholders in attracting foreign investment or BYD’s assessment that local factors such as a dynamic market, lower labor costs, or tax benefits could reduce manufacturing expenses and enhance the competitiveness of its EVs both domestically and internationally. BYD’s decision may also be influenced by Pakistan’s GSP Plus status with the European Union (EU), which was granted in 2014 following the catastrophic floods of August 2013. The EU’s GSP Plus scheme, which was evaluated in a November 2023 report, provides Pakistan with zero-rated or preferential tariffs on nearly 66% of tariff lines, thus boosting its export potential to the EU. The report acknowledged progress in Pakistan’s legislative framework but highlighted the need for better practical implementation. It remains unclear if BYD’s Pakistani-made EVs will qualify for these preferential tariffs. Earlier this year, the European Commission imposed steep tariffs on EVs, though companies that cooperated with EU anti-subsidy measures faced a lower tariff increase of 17.4%, in addition to the existing 10%. BYD, facing the lowest hike of 17.4%, has yet to disclose any potential price adjustments for its EVs in the EU. BYD is not new to international expansion; it opened a factory in Thailand in July 2024, its first outside China, with a $450 million investment aimed at exporting to ASEAN countries. The Thai plant is part of a broader $1.44 billion investment in the region, supported by subsidies and tax incentives. BYD has also planned manufacturing ventures in Hungary, Turkey, and Brazil. At the launch event in Lahore, BYD General Manager for Asia Pacific, Xueliang, emphasized that the company’s entry into Pakistan is not just about offering advanced vehicles but also about promoting environmental responsibility and technological innovation. BYD plans to open three flagship stores and experience centers in Pakistan and to introduce two SUV models and a sedan between October and December 2024. Hubco’s CEO highlighted the significance of BYD’s investment, noting that the plant will commence operations in 2026. This will mark the establishment of Pakistan’s first dedicated EV manufacturing plant. Details on the level of foreign direct investment, local and foreign equity, or applicable taxes have not yet been disclosed. Currently, Pakistan has only eight electric vehicle charging stations—three in Islamabad, two in Lahore, and one each in Karachi, Hafizabad, and Sargodha. Hubco has pledged to set up fast charging stations in major cities and along major highways. However, the power sector in Pakistan faces significant challenges, including high tariffs and a circular energy debt of 2.4 trillion rupees, which impacts the cost and reliability of electricity. The energy sector issues are compounded by firm contracts with 2015 Independent Power Producers (IPPs), mainly Chinese firms, which involve capacity payments. These contracts contribute to higher electricity costs and hinder efforts to transition to cheaper renewable energy sources. Current energy reforms have focused on shutting off electricity to areas with high arrears, providing untargeted subsidies to low-consumption households, and considering privatization without adequate evaluation of past performance. There is a need for comprehensive reform in the energy sector, including abandoning tariff equalization policies and ensuring fair practices after the sale of distribution companies. In conclusion, it is crucial that the Law Ministry, Federal Board of Revenue (FBR), and Finance Ministry carefully review the agreement with BYD to avoid repeating past mistakes with IPP contracts and to ensure that the public does not bear an undue burden in the future.

Moody’s has upgraded Pakistan’s credit rating from Caa3 to Caa2, reflecting improvements in the country’s macroeconomic conditions and liquidity, although challenges remain. The positive outlook signifies potential for further upgrades if Pakistan continues reform efforts and secures external financing. Key points from the Moody’s update: In summary, while the upgrade and positive outlook are signs of progress, Pakistan’s ability to sustain reforms, manage debt, and secure external financing will be critical for further improvement in its credit rating.