KARACHI: Pakistan’s remittances jumped to $3.1 billion in December 2024, reflecting a 29.3% year-on-year increase, according to data from the State Bank of Pakistan (SBP) released on Friday. This figure also marks a 5.6% rise compared to November 2024.
First Half of FY2024-25
Cumulatively, remittances for the first half of the fiscal year (July-December 2024) totaled $17.8 billion, a substantial 32.8% growth over the $13.4 billion received in the corresponding period of FY2023-24.
Factors Behind the Increase
Several economic drivers contributed to the surge in remittance inflows:
- Economic recovery and IMF-backed reforms providing greater economic stability.
- A stable local currency, reducing incentives for informal market transactions.
- Incentives for banks and money exchangers to encourage formal remittance channels.
- An expanding Pakistani diaspora and higher earnings in key foreign markets.
- Global inflation easing, which increased migrants’ ability to send money home.
Former Finance Ministry advisor Dr. Khaqan Najeeb noted that exchange rate stabilization and improved digital remittance infrastructure have helped divert flows from the informal hawala/hundi system to official banking channels.
Key Sources of Remittances
The primary remittance-sending countries in December 2024 included:
- Saudi Arabia: $770.6 million
- United Arab Emirates: $631.5 million
- United Kingdom: $456.9 million
- United States: $284.3 million
Other GCC countries also contributed significant amounts, including Oman ($108.5 million), Qatar ($89.2 million), Kuwait ($71.1 million), and Bahrain ($41.2 million).
Role in Economic Stability
Remittances play a critical role in bolstering foreign exchange reserves and stabilizing Pakistan’s balance of payments. Given rising domestic inflation, remittances have also provided crucial household support.
The SBP and government anticipate remittances could reach a record $35 billion by FY2024-25, further enhancing external financing and economic resilience.
