In December 2024, remittances to Pakistan reached $3.08 billion, reflecting an impressive 29.3 percent year-on-year growth. Saudi Arabia led this surge, contributing $771 million—a 33.4 percent increase compared to December 2023—followed by the United Arab Emirates (UAE) with $631 million, showcasing an exceptional 53.6 percent rise. The United Kingdom also played a significant role, sending $457 million, marking a 24.2 percent growth from the previous year.
During the first half of the fiscal year 2024-25 (July to December 2024), total remittances surged to $17.8 billion, reflecting a robust 32.8 percent increase compared to the $13.4 billion recorded during the same period of the previous fiscal year. This significant growth highlights the strengthening of formal channels for remittance inflows.
On an annual basis, remittances in calendar year 2024 grew by 31 percent compared to CY23, underscoring the consistent improvement. A month-to-month comparison reveals that CY24 consistently outperformed CY23, with December 2024 recording the highest inflows of $3.08 billion.
This steady growth, particularly from May to December, was driven by regulatory reforms, incentives for formal remittance channels, and measures to narrow the black-market and interbank exchange rate gap. These efforts stabilized the rupee against the dollar, providing a strong foundation for the remarkable increase in remittances.
Higher remittance inflows have undoubtedly bolstered Pakistan’s foreign exchange reserves and provided relief to its economic challenges. However, overreliance on remittances can hinder long-term economic stability and growth. Dependence on external inflows exposes the economy to global shocks and often leads to brain drain and reduced focus on developing domestic industries. To mitigate these risks, it is imperative for the government to diversify the economy, invest in productive domestic sectors, promote sustainable use of remittances, and address systemic issues such as inflationary pressures and the outflow of skilled labor. These measures are essential for fostering a more resilient and balanced economic future.
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