Key points:
- Remittances rise 13 per cent year-on-year
- Strong inflows support Pakistan’s external account
ISLAMABAD: Pakistan received $3.6 billion in workers’ remittances in July 2026, marking a 13 per cent increase from the same month a year earlier, and maintaining the growth momentum, according to the State Bank of Pakistan.
The inflows also increased 4.5 per cent from $3.47 billion in June, providing a strong start to the new fiscal year. The central bank reported that remittances reached $3.63 billion during July.
Saudi Arabia remained the largest source of remittances, followed by the United Arab Emirates, the United Kingdom and the United States, according to data reported by the central bank.
The latest inflow was registered in the new fiscal year after the country posted a record $41.6 billion in workers’ remittances during 2025-26, with an 8.6 per cent increase from $38.3 billion a year earlier.
Remittances; Pakistan’s critical source of forex
Remittances have become a critical source of foreign exchange for the forex strained economy, helping finance imports, support household incomes and strengthen the country’s external account.
They have also provided an important cushion against pressures arising from the trade deficit and external debt repayments.
The sustained growth in remittances has been supported by increased use of formal banking channels, improved exchange-rate stability and continued migration of workers abroad.
The strong July inflow is expected to reinforce Pakistan’s foreign-exchange position at the beginning of fiscal year 2026-27 and help support the central bank’s reserve-building efforts.
Pakistan’s remittance inflows have become one of the country’s most important sources of foreign exchange, providing a crucial buffer for an economy that has repeatedly faced pressure on its balance of payments.
Millions of expatriates working in the Gulf, Europe, North America and other regions send money home each year, mostly monthly, supporting household consumption and helping finance the country’s external obligations.
ALSO READ: Pakistan Remittances Jump 8.6 Percent to $41.6 Billion in FY2025-26
Saudi Arabia has consistently remained Pakistan’s largest single source of workers’ remittances, reflecting the large Pakistani workforce in the Kingdom and longstanding economic ties between the two countries.
The United Arab Emirates, the United Kingdom and the United States are other major sources. The Gulf states collectively account for a substantial share of Pakistan’s remittance receipts.
Remittances have grown significantly in recent years, reaching a record $41.6 billion in fiscal year 2025-26, according to the SBP data. The record inflow followed years in which Pakistan struggled with depleted foreign-exchange reserves, a wide current-account deficit and heavy external debt-servicing requirements.
For the economy, emittances are particularly valuable because they provide a relatively stable source of foreign currency without creating an additional repayment obligation.
They help pay for imports, strengthen the country’s foreign-exchange reserves and reduce pressure on the current account.
At times of heightened external-financing stress, strong remittance inflows can also help narrow the gap between foreign-exchange earnings and payments.
The importance of remittances has increased as the country’s economy struggles to maintain external stability and rebuild reserves under its economic reform programme.
Sustained inflows can ease pressure on the rupee, support reserve accumulation and reduce reliance on borrowing or emergency external financing.
The government and central bank have also encouraged expatriates to use formal banking channels to send money home, seeking to reduce leakages through informal transfer systems.
The continued dominance of Saudi Arabia as a source means that remittance trends from the kingdom remain closely watched as an indicator of the country’s external-sector health.
Overseas workers can send money home through a range of formal channels, including commercial banks, exchange companies and licensed money-transfer operators.
Transfers can be made through bank accounts, mobile and digital remittance services, or cash-pickup arrangements through authorised institutions.
The SBP has also promoted formal remittance channels through initiatives such as the Pakistan Remittance Initiative, encouraging expatriates to use regulated services rather than informal networks.
These channels provide greater transparency and help ensure that foreign exchange reaches Pakistan’s banking system, supporting the country’s reserves and balance of payments.
