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Analytical Review of the Surge in Home Remittances Overview of Growth Trends Home remittances experienced a significant 32.89% increase during the July-December 2024 period compared to the same timeframe the previous year. Total inflows stood at $17.845 billion, surpassing the $13.845 billion recorded in the corresponding period of 2023 and the $14.435 billion seen in July-December 2023. This sharp increase exceeds the 24.9% growth recorded in July-December 2021, making it a notable recovery. However, this comparison must be understood in the context of the sharp decline in remittances in 2022, which was largely attributed to flawed foreign exchange policies under former Finance Minister Ishaq Dar. His intervention in currency markets, despite declining foreign reserves, led to multiple exchange rates and discouraged the use of official banking channels, pushing remitters toward informal systems such as hundi/hawala. Policy Impact and Market Correction The upward trend in remittances began in July-December 2023, coinciding with the government’s policy shift and agreement with the International Monetary Fund (IMF) for a $3 billion Stand-By Arrangement. The decision to abandon interventionist currency policies and incentivize remittances through formal channels played a crucial role in reversing the previous decline. If this growth trajectory is projected to the end of the fiscal year (June 30, 2025), total remittances could reach approximately $35.69 billion. This would represent an increase of $4.45 billion compared to the $31.2 billion recorded in the 2021-22 fiscal year. However, while policy adjustments have contributed to this recovery, external economic factors and structural shifts also play a critical role. Macroeconomic Drivers of Remittance Growth A July 2024 working paper by the Asian Development Bank (ADB), titled Understanding the Drivers of Remittances to Pakistan, identifies key macroeconomic factors influencing remittance flows: The study also highlights that remittance patterns are shaped by broader structural factors beyond these macroeconomic indicators. Migrants’ personal motivations—such as supporting families, investment opportunities, and perceptions of economic stability—play a critical role in sustaining remittance flows over time. Challenges Despite Positive Indicators While the government has cited a record-low Consumer Price Index (CPI) of 2.4% in January 2025, this figure does not reflect real economic conditions. Several key challenges persist: Strategic Implications and Policy Considerations The ADB study reinforces the critical role of remittances in stabilizing Pakistan’s balance of payments. As global economic conditions remain uncertain, policymakers must adopt a forward-looking approach to ensure these inflows remain strong. The government’s current focus is twofold: While these measures are essential, they do not address deeper structural issues. The ongoing brain drain and mass deportations of undocumented workers highlight the lack of sustainable employment opportunities within Pakistan. To mitigate this, a broader economic reform strategy is needed, including: Conclusion While remittance inflows have surged, the underlying economic challenges remain unresolved. A sustainable long-term strategy requires not only supporting remittance growth but also fostering domestic economic stability through structural reforms. Without these measures, Pakistan risks remaining overly dependent on remittance inflows while failing to address its broader economic vulnerabilities.

Pakistan’s remittance inflows amounted to $3 billion in January 2025, reflecting a 3.2% decline compared to $3.1 billion in December 2024. However, on a year-over-year (YoY) basis, inflows surged by 25.2%, significantly higher than the $2.4 billion recorded in January 2024, according to data released by the State Bank of Pakistan (SBP). Cumulative Growth in FY25 The cumulative remittance inflows for the first seven months of FY25 (July–January) reached $20.8 billion, marking an increase of 31.7% compared to $15.8 billion in the same period of FY24. This upward trend highlights the growing contribution of overseas workers’ earnings to Pakistan’s foreign exchange reserves. Economic Impact of Remittances Home remittances serve as a critical pillar of Pakistan’s economy by: Country-Wise Breakdown of Inflows 1. Saudi Arabia – Largest Contributor 2. United Arab Emirates (UAE) – Moderate Monthly Increase, Strong Annual Growth 3. United Kingdom (UK) – Decline on Monthly Basis, Growth on Yearly Basis 4. United States (US) – Consistent Monthly Growth Key Takeaways This data underscores the critical role of remittances in stabilizing Pakistan’s economy and highlights potential areas for policy intervention to sustain and enhance inflows.

Cumulative inflows under the Roshan Digital Account (RDA) initiative have reached $9.34 billion since its inception in September 2020. According to data released by the State Bank of Pakistan (SBP) on Saturday, RDA inflows rose to $203 million in December 2024, reflecting a 9% increase from the $186 million recorded in November. Out of December’s total inflows, $13 million was repatriated, while $113 million was utilized locally. This leaves a net repatriable liability of $76 million for the month. Since the launch of RDA, $1.7 billion of the cumulative inflows has been repatriated, while $5.911 billion has been invested or used within Pakistan. The total net repatriable liability now stands at $1.73 billion. The number of RDA accounts opened also grew, reaching 778,713 by the end of December—an increase of 10,319 accounts from November’s total of 768,394. Of the outstanding liabilities, $1.208 billion is linked to Naya Pakistan Certificates (NPCs), with $460 million in conventional NPCs and $748 million in Islamic instruments. An additional $425 million is classified as “balances in accounts,” according to SBP data. Roshan Equity Investments also showed significant growth, climbing to $59 million in December, a 16% increase compared to the previous month.

The Roshan Digital Account (RDA) has emerged as a transformative financial platform for engaging the Pakistani diaspora, reaching cumulative inflows of $9.34 billion by December 2024. Launched in September 2020, the initiative has facilitated investments that have not only strengthened economic ties with overseas Pakistanis but also significantly contributed to Pakistan’s domestic economy. Utilization and Repatriation BreakdownOf the $9.34 billion inflows:$5.91 billion (63.3%) has been utilised locally.$1.7 billion (18.2%) has been repatriated abroad.$1.73 billion (18.5%) remains as net repatriable liability, underscoring a balanced framework that permits repatriation while stimulating local economic activity.The allocation of funds includes: Naya Pakistan Certificates (NPCs):$460 million in conventional NPCs.$748 million in Islamic NPCs.Roshan Equity Investments: $59 million.Other Liabilities: $39 million.Account Balances: $425 million.Indicators of Confidence and Economic IntegrationAccording to Ali Najib, Head of Equity Sales at Insight Securities, the RDA has facilitated net investments of $1.27 billion, reflecting the diaspora’s trust in Pakistan’s financial framework. He attributes this growth to: Attractive returns on NPCs.Tax benefits.Sharia-compliant investment options.The initiative’s fully digital process, coupled with seamless repatriation options and government-backed guarantees, has further enhanced investor confidence. Macroeconomic and Financial ImpactsAHL Research highlights the RDA’s role as a barometer of diaspora confidence, emphasizing its contribution to Pakistan’s economy: Diversified investment products have channeled over 63% of inflows into domestic ventures, including real estate and the stock market, stimulating economic activity.Flexible repatriation policies ensure ease of fund mobility without imposing restrictions, a critical factor in retaining diaspora engagement.Despite these successes, maintaining manageable net repatriable liabilities, currently at $1.73 billion, will be key to ensuring financial stability. Trends and Emerging PatternsHistorical data reveals two key trends: Peak Repatriations: Monthly repatriations peaked in mid-2022, followed by a gradual decline.Dominance of Local Utilization: A steady increase in locally utilized funds, underscoring the scheme’s effectiveness in driving domestic economic growth.Challenges and Strategic ConsiderationsWhile the RDA has successfully mobilized funds from Non-Resident Pakistanis (NRPs), sustaining this momentum will require: Promoting long-term investment avenues.Transparent governance and consistent macroeconomic policies.Enhanced marketing campaigns to address evolving diaspora needs.Global economic conditions, such as rising inflation and low international returns, have further amplified the appeal of RDA’s offerings. To ensure its sustained impact, Pakistan must focus on maintaining investor trust and providing competitive, diversified investment options. ConclusionThe RDA has proven to be a pivotal financial initiative, bolstering Pakistan’s foreign reserves and economic stability. By fostering trust and continuously adapting to the needs of the diaspora, the platform has not only strengthened the economic bridge between Pakistan and its expatriates but also set a foundation for sustained economic growth. Ensuring the initiative’s scalability and resilience in the face of global economic shifts will be critical in maximizing its long-term potential.

Remittances surge upwards in the last month of 2024 Pakistan’s remittance inflows reached $3.08 billion in December 2024, reflecting a 6% increase from the $2.92 billion recorded in November 2024, according to data released by the State Bank of Pakistan (SBP) on Friday. The inflows for December 2024 were also 29.3% higher compared to $2.38 billion in the same month the previous year. In the first half of FY25, remittances surged 33% year-on-year, reaching $17.8 billion, compared to $13.4 billion in the first half of FY24. These remittance inflows play a vital role in supporting Pakistan’s external account, boosting economic activity, and supplementing the incomes of households that depend on remittances. Finance Minister Muhammad Aurangzeb previously indicated that remittance inflows are expected to reach a record $35 billion in FY25, up from $30.25 billion in FY24. SBP Governor Jameel Ahmad also expressed confidence that the $35 billion target will be met by the end of the fiscal year. Breakdown of Remittances:

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.