December Remittances Reach $3.1bn, Showing 29.6% Growth
December Remittances Reach $3.1bn, Showing 29.6% Growth
Remittances to Pakistan reached $3.1 billion in December, reflecting a year-on-year increase of 29.3%, according to the central bank’s data released on Friday, demonstrating ongoing financial support from overseas Pakistanis in light of challenging economic circumstances.
The State Bank of Pakistan (SBP) reported that remittance flows increased annually and saw a monthly rise of 5.6%. Overall, with a total inflow of $17.8 billion, workers’ remittances surged by 32.8% during the first half of the fiscal year 2024-25 (July-December), compared to $13.4 billion received in the same timeframe last year, as stated by the central bank. The growth in remittance inflows is attributed to Pakistan’s economic recovery, facilitated by IMF loans, a stable local currency, incentives for banks and money changers, and an increasing trend of skilled Pakistani workers migrating abroad. Significant factors driving the rise in official remittance flows include reforms that have reduced illegal foreign exchange trading and incentives introduced by the SBP.
The decline in global inflation rates has also motivated Pakistani migrants to remit more significant amounts back home. Dr. Khaqan Najeeb, a former Advisor at the Ministry of Finance, mentioned to Geo.tv that various favorable conditions have contributed to the substantial rise in remittances. “This includes the growth of the Pakistani diaspora, increased earnings in key destination countries, stabilization of the exchange rate (narrowing the gap between interbank and open market rates) promoting formal channels, and enhanced digital infrastructure.” He also pointed out that with high inflation levels within the country, there is a greater demand for support from those working abroad. “Increased remittances have been vital in managing the country’s external account.” Remittance flows during December 2024 primarily came from Saudi Arabia ($770.6 million), the United Arab Emirates ($631.5 million), the United Kingdom ($456.9 million), and the United States ($284.3 million). Other Gulf Cooperation Council (GCC) countries contributing included Oman ($108.5 million), Qatar ($89.2 million), Kuwait ($71.1 million), and Bahrain ($41.2 million), according to the data from the SBP. Remittances from the diaspora are an essential source of external financing for Pakistan, as they not only bolster foreign exchange reserves but also assist in balancing the payments. Furthermore, the central bank and the government anticipate that remittances will reach an all-time high of $35 billion in FY25.
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