Inflow of overseas workers’ remittances into Pakistan stood at $3.052 billion in October 2024, a substantial 24% increase on a year-on-year (YoY) basis when compared with $2.463 billion in the same month of the previous year, showed data released on Friday by the State Bank of Pakistan (SBP).
On a month-on-month (MoM) basis, the inflow in October was 7% higher when compared to $2.86 billion in September 2024.
During 4MFY25, remittances went up by nearly 35% YoY to $11.8 billion as compared to $8.8 billion in 4MFY24.
Experts credit the increase in inflows to the stability of the exchange rate, a narrowing gap between open and inter-bank market rates, increase in digital payment channels and a rise in the number of workers relocating abroad, especially to GCC countries.
“These stronger inflows will help Pakistan maintain PKR stability and contain the current account deficit,” said Mohammed Sohail, CEO Topline Securities, in a note.
Home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing the disposable incomes of remittance-dependent households.
Breakdown of remittances
Overseas Pakistanis in Saudi Arabia remitted the largest amount in October 2024 as they sent $766.7 million during the month. The amount was up by 12% on a monthly basis, and 24% higher than the $616.8 million sent by the expatriates in the same month of the previous year.
Inflows from the United Arab Emirates (UAE) improved by 10% on a monthly basis, from $562.7 million in September to $620.9 million in October. On a yearly basis, remittances jumped by 31%, as compared to $473.9 million reported in the same month last year.
Remittances from the United Kingdom amounted to $429.5 million during the month, inching up 1% compared to $424.1 million in September 2024. YoY inflows from UK improved by 30%
Meanwhile, remittances from the European Union decreased by 2% MoM as they amounted to $359.1 million in October 2024, as compared to $365.5 million in September.
Overseas Pakistanis in the US sent $299.3 million in October 2024, a MoM increase of 8%.
Last month, the SBP, to enhance the flow of home remittances, revamped the incentive structure for banks and Exchange Companies (ECs). Under the system, both banks and ECs will receive two types of incentives – Fixed Component Incentives and Variable Component Incentives.