ISLAMABAD: Remittances sent by Pakistani workers abroad increased by 31 percent on a month-on-month basis in March, the Pakistani central bank said on Friday, with Saudi Arabia being the top contributor.
Remittances bring billions of dollars annually from overseas Pakistanis and are vital to Pakistan’s economy. These inflows bolster foreign exchange reserves, stabilize the balance of payments, and support the Pakistani currency.
Pakistani expatriates sent a total of $3 billion during the month of March, according to official figures shared by the State Bank of Pakistan (SBP).
“In terms of growth, during March 24, remittances increased significantly by 31.3 percent on m/m basis and 16.4 percent on y/y basis,” the SBP said in a statement.
Saudi Arabia contributed the most to the inflows with $703.1 million, followed by the United Arab Emirates at $548.5 million, the United Kingdom at $461.5 million and the United States at $372.5 million.
Pakistan and Saudi Arabia have deep cultural, defense and economic ties. The kingdom is home to over two million Pakistanis and for years has remained the largest contributor to remittance inflows.
Remittances play a major role in supporting Pakistan’s external account, especially at a time when the country is grappling with an economic crisis that has weakened its currency and caused its foreign exchange reserves to plummet.
The central bank said it had recorded inflows of $21 billion during first nine months of this fiscal year, which began on July 1.
In March, experts predicted a sustained surge in Pakistan’s remittances in the next few months due to political and economic stability, improved control over illegal money flows and major religious festivals like Eid Al-Fitr ahead.
“Recent months have seen effective control over the gap between interbank and open market rates, leading to more remittances through legal channels as when this gap is wide, expatriates tend to resort to unofficial channels for money transfers,” Tahir Abbas, head of research at Arif Habib Limited securities firm, told Arab News, adding this upward trend is expected to continue for the next four months, driven by factors such as Ramadan, Zakat collection, and Eid festivals.
“Next three months are expected to have a huge boost with over $2.5 billion remittances each due to two Eid festivals. To sustain this positive trend in the long term, the government must prioritize digitalization efforts, intensify crackdowns on illegal channels, and maintain a balanced approach to managing the country’s balance of payments.”
Pakistan has set a worker remittance inflow target of $28.5 billion for the current year.
