Karachi: Pakistan recorded a record USD 4.1 billion in worker remittances for March 2025, marking a 30% increase from February and a 37% year-on-year rise. Experts attribute this surge to a combination of factors, including the festive season of Eid and Ramazan, the increasing number of Pakistanis seeking jobs abroad, the country’s macroeconomic stability, and a crackdown on informal money exchange channels.

Khaqan Najeeb, former adviser to the Ministry of Finance, highlighted that while the Eid season typically brings a seasonal spike in remittances, the increase also signals growing confidence in formal banking channels. He pointed out that a stable exchange rate has been crucial in re-routing funds through official channels, moving away from the informal hawala and hundi systems. This is a key factor in Pakistan’s efforts to support its foreign exchange reserves and manage the balance of payments amidst ongoing IMF-backed reforms.

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March remittances were led by Saudi Arabia, with inflows of USD 987 million, followed by the UAE at USD 842 million, the UK at USD 684 million, and the US at USD 419 million. Notably, remittances from the UAE surged 54% compared to the same month last year, while those from the UK saw a 48% rise.

Macroeconomist Ammar Habib Khan agreed with Najeeb’s assessment, stating that the increase in remittances is largely seasonal, influenced by the festive period of Ramazan and Eid. He emphasized that the continued stability of the rupee ensures that remittances flow through formal channels, helping to stabilize Pakistan’s external account.

For the first nine months of the fiscal year (July-March), remittances totaled USD 28.03 billion, up 33% from the previous year. This surge is also reflected in key regions such as the EU, which saw a 38% year-on-year rise in March, Canada at 39%, and Australia at 29%. Additionally, remittances from other Gulf Cooperation Council (GCC) countries, apart from Saudi Arabia and the UAE, increased by 19%.

Dr. Abid Suleri, head of the Sustainable Development Policy Institute (SDPI), attributed the increase to Pakistan’s commitment to the Financial Action Task Force (FATF) regulations, which have made it more difficult for people to use informal remittance channels. He also noted that the stable rupee has boosted confidence among senders, who prefer not to risk currency fluctuations.

Read: Workers’ remittances projected to hit record USD 35Bn in FY25: Finance Minister

The trend also reflects a shift in investment habits among overseas Pakistanis, with many moving away from the real estate sector due to high taxation and regulations, and instead, parking their money in dollar accounts.

Experts predict that the country will end the year with record remittances, further bolstering Pakistan’s foreign exchange reserves and supporting its economic recovery.

Khaqan Najeeb added that while the festive surge is significant, the real test will come in the months ahead. He emphasized that if the upward trend continues beyond the Eid factor, it will provide crucial stability to Pakistan’s external account.

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