KARACHI: In a historic economic turnaround, Pakistan has achieved two major milestones – development spending surpassing Rs1.14 trillion and record-high remittances of $38.3 billion – both signaling the positive trajectory under the economic leadership of Prime Minister Mian Muhammad Shehbaz Sharif and his diligent team.
These achievements, amid persistent macroeconomic challenges, are no coincidence. They stem from strategic policy execution, tighter financial discipline, and a clear focus on national development, demonstrating that even in constrained circumstances, vision, willpower, and coordination can deliver results that uplift a nation.
For fiscal year 2024-25, overseas Pakistanis sent a record-breaking $38.3 billion, marking a 27% year-on-year increase – making Pakistan the 5th highest remittance-receiving country in the world.
This surge is not only a testament to the unbreakable bond between overseas Pakistanis and their homeland, but also the result of sound government policy. The formalisation of remittance channels under the Pakistan Remittance Initiative (PRI), incentivised by the State Bank of Pakistan, played a central role. It reduced dependency on informal means such as Hundi and Hawala, channelling billions through regulated banks.
“The increased flows reflect growing confidence in Pakistan’s financial system,” noted Ali Najib, Deputy Head of Trading at Arif Habib Limited. The initiative offered zero-cost remittance options and formal banking avenues like Roshan Digital Accounts, which empowered overseas Pakistanis to invest, save, and send money securely.
The UK alone contributed $5.9 billion, while Saudi Arabia led with $9.3 billion, followed by the UAE ($7.8 billion) and EU nations ($4.5 billion). These corridors alone accounted for over 70% of the total, underlining the importance of bilateral relations and labour market alignment.
Yet, June 2025 saw an 8% MoM decline, a seasonal dip after Eidul Azha – a common trend. While the dip demands cautious attention, the overall year-end record underscores structural strength and shows that Pakistan’s diaspora continues to trust the formal economic system, a direct result of government reforms and trust-building efforts.
Challenges on the Horizon
Despite the milestone, there are emerging warning signs. The decline in monthly remittances from key countries like the US (-10.5% MoM), UK (-8.6%), and UAE (-4.9%) signals concentration risk. If political or regulatory turbulence emerges in these geographies, Pakistan’s financial stability could be at risk.
Moreover, developed markets like Japan (-30.4%) and Canada (-8.6%) saw declines – indicating that Pakistani workers in these economies may be facing inflation, integration barriers, or reduced disposable incomes.
An equally concerning development is the disagreement between the SBP and federal government regarding PRI subsidies. With Rs85 billion allocated last year, and none this year, the shift has raised concerns that remittances may drift back to informal channels.
Dr. Inayat Hussain, Acting Deputy Governor SBP, warned the Senate Standing Committee that withdrawing subsidies too quickly could undo years of progress. The introduction of a flat SAR 20 rebate and raising the minimum eligible transaction to $200 from $100 may disincentivise small yet vital remittances – especially from low-wage workers in the Gulf.
Still, Finance Ministry officials argue that the cost of sustaining subsidies (Rs200 billion billed) has become unsustainable, pushing for a phased, evidence-based exit strategy, including integration with platforms like Raast, Buna, and SAMA.
Despite the debate, it is evident that this government recognises remittances as a lifeline. Any change in policy is being approached with caution and technical due diligence – to balance cost-efficiency and diaspora engagement.
Record-breaking development report: If remittances were the heart of financial stability, development spending became the engine of national progress.
Federal Minister for Planning Ahsan Iqbal, while launching the Monthly Development Report, confirmed that Rs1.146 trillion was utilised out of the Rs1.1 trillion revised PSDP, marking the highest-ever public development spending in Pakistan’s history.
“This is not just a figure – it is a declaration that development is our top priority,” said the minister. “No backlog, no lapses. Every penny spent efficiently.”
Originally set at Rs1.4 trillion, the PSDP had to be revised downward due to macroeconomic constraints. However, the 95%+ utilisation rate showcases exceptional coordination across ministries, especially during an election year – when governments typically struggle to execute.
The spending spanned across education, infrastructure, energy, water, and health sectors, creating a multiplier effect across the economy.
“From roads to universities to renewable energy projects – this government built real things that matter,” said Iqbal. He noted that under the “Uraan Pakistan” economic revival initiative, inflation has dropped to 4.5% – the lowest in 9 years – a testament to fiscal discipline and smart planning.
The Shehbaz-led administration has continually proven that its economic model is pro-people, pro-growth, and reform-oriented. By stabilising the rupee, reducing inflation, expanding digital banking, and cutting red tape, the government has laid the groundwork for sustainable growth.
In the face of: Global oil shocks, Domestic political uncertainty, Climate-induced disasters, and external debt servicing pressures,…it is no small feat that Pakistan has maintained macroeconomic stability, kept its export sector afloat, and built forex reserves.
Most importantly, jobs were created, industries were supported, and trust was restored in public institutions – particularly through Roshan Digital Accounts, the TT Charges Scheme, and PSDP execution.
However, the job is far from over. Experts believe that going forward, the government must:
– Diversify remittance corridors to reduce over-dependence on the Gulf and UK.
– Invest in skilled labour exports, such as IT, healthcare, and engineering professionals.
– Revisit subsidy models to balance cost and incentive.
– Promote diaspora investment opportunities, especially in real estate and startup sectors.
– Enhance monitoring of informal channels, especially as incentives are reduced.
With Uraan Pakistan taking flight, the next goal must be sustained altitude, backed by inclusive reforms, diaspora empowerment, and debt restructuring.
Pakistan’s current leadership has shown what is possible with political will, technocratic governance, and diaspora support.From crossing the Rs1 trillion development spend milestone to breaking remittance records, 2025 will be remembered as a turning point in the country’s economic journey.
And as challenges evolve – with global economic uncertainty, climate threats, and digital disruptions – the government’s adaptability, pro-digital reforms, and overseas engagement strategy will determine the pace of future progress.
From London to Lahore, Manchester to Multan, the message is clear: Pakistan is back on the path of stability, growth, and dignity – and the people, at home and abroad, are making it happen.
However, the job is far from over. Experts believe that going forward, the government must:
– Diversify remittance corridors to reduce over-dependence on the Gulf and UK.
– Invest in skilled labour exports, such as IT, healthcare, and engineering professionals.
– Revisit subsidy models to balance cost and incentive.
– Promote diaspora investment opportunities, especially in real estate and startup sectors.
– Enhance monitoring of informal channels, especially as incentives are reduced.
With Uraan Pakistan taking flight, the next goal must be sustained altitude, backed by inclusive reforms, diaspora empowerment, and debt restructuring.
Pakistan’s current leadership has shown what is possible with political will, technocratic governance, and diaspora support.From crossing the Rs1 trillion development spend milestone to breaking remittance records, 2025 will be remembered as a turning point in the country’s economic journey.
And as challenges evolve – with global economic uncertainty, climate threats, and digital disruptions – the government’s adaptability, pro-digital reforms, and overseas engagement strategy will determine the pace of future progress.
From London to Lahore, Manchester to Multan, the message is clear: Pakistan is back on the path of stability, growth, and dignity – and the people, at home and abroad, are making it happen.
