KARACHI: Pakistan received $3.7 billion in workers’ remittances in May 2025, a strong 16 percent increase month-on-month and 13.7 percent year-on-year, the State Bank of Pakistan (SBP) said on Wednesday, with Saudi Arabia remaining the largest contributor, sending $913.9 million.

The inflows brought total remittances for July-May FY2024-25 to $34.9 billion, marking a 28.8 percent increase from $27.1 billion in the same period last year. The rise follows a record breaking $4.1 billion in March, the highest-ever single-month inflow, and a robust $3.2 billion in April. 

The strong performance has helped offset Pakistan’s trade deficit and support its fragile foreign exchange reserves amid continued macroeconomic pressure.

“This is the highest level of remittances recorded in recent months,” the SBP said in a statement, noting that the increase reflected stronger flows from key corridors and a growing shift toward formal remittances channels. 

Analysts attribute the surge to a combination of factors, including improved exchange rate management, government crackdowns on hawala and hundi informal systems for transferring money internationally, and seasonal flows during Ramadan and Eid.

Saudi Arabia remained the largest contributor in May, sending $913.9 million, followed by the United Arab Emirates ($754.2 million), the United Kingdom ($588.1 million), and the United States ($314.7 million).

Remittances remain a critical source of foreign exchange for Pakistan, which is currently under a $7 billion IMF program and facing over $24 billion in external debt repayments over the next fiscal year.

The central bank has raised its full-year remittance forecast to $38 billion, reflecting optimism that flows will continue to support economic stabilization.

The surging remittances, especially from Saudi Arabia, help cushion Pakistan’s chronic current‑account deficit and bolster its foreign exchange reserves, offering relief ahead of major debt repayments. With global commodity prices still volatile and external financing constrained, continued inflows from overseas workers, particularly from the Gulf, are seen as crucial to maintaining macroeconomic stability and supporting Pakistan’s growth outlook under IMF conditions.