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:
- Supporting the external account, helping to bridge the trade deficit.
- Boosting economic activity through increased household spending.
- Enhancing disposable income for families dependent on overseas earnings.
Country-Wise Breakdown of Inflows
1. Saudi Arabia – Largest Contributor
- Total Inflows: $728.3 million (January 2025)
- Month-on-Month (MoM) Change: Down 5.5% from December 2024
- Year-on-Year (YoY) Change: Up 24% from $587.4 million in January 2024
2. United Arab Emirates (UAE) – Moderate Monthly Increase, Strong Annual Growth
- Total Inflows: $621.7 million
- MoM Change: Up 0.37% from $619.4 million in December 2024
- YoY Change: Up 53% from $407.6 million in January 2024
3. United Kingdom (UK) – Decline on Monthly Basis, Growth on Yearly Basis
- Total Inflows: $443.6 million
- MoM Change: Down 3% from $456.9 million in December 2024
- YoY Change: Up 22%
4. United States (US) – Consistent Monthly Growth
- Total Inflows: $298.5 million
- MoM Change: Up 5%
Key Takeaways
- While remittances declined on a monthly basis, the strong annual growth indicates increasing reliance on foreign earnings.
- Saudi Arabia remains the largest source of remittances, though its MoM inflows declined.
- The UAE showed the highest annual growth rate (53%), signaling stronger inflows from the Gulf region.
- The US demonstrated steady month-on-month growth, suggesting resilience in remittance flows from North America.
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.