Remittances Reach Record $38.3 Billion in FY25 Despite Monthly Dip
Pakistan received a record $38.3 billion in worker remittances during the fiscal year 2024–25, marking a 27 percent year-on-year increase. The significant rise came despite an 8 percent month-on-month decline in June, when inflows dropped to $3.41 billion from May’s $3.69 billion. The June figure, however, was still 8 percent higher than the $3.2 billion recorded in June 2024.
The record annual inflows were driven by increased migration amid political and economic uncertainty, along with a range of policy measures that encouraged the use of formal remittance channels. Major contributors to the surge included Saudi Arabia with $9.3 billion (up 26%), the UAE with $7.8 billion (up 41%), and the UK with $5.9 billion (up 31%). Inflows from European Union countries also grew sharply, reaching $4.5 billion, up 29% from the previous year. These gains helped offset a 13% year-on-year decline in remittances from the United States.
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According to financial analysts, multiple factors contributed to the strong performance. Improved economic conditions in host countries, especially in the Gulf region, boosted the earnings of overseas Pakistanis. In addition, government initiatives such as the Pakistan Remittance Initiative (PRI) and the growing use of digital platforms like Roshan Digital Accounts encouraged more formal transfers. The relative stability of the rupee and tighter controls on the foreign exchange market further made official channels more appealing.
Arif Habib Limited’s Deputy Head of Trading, Ali Najib, noted that the formalisation of remittance flows and reduced dependence on informal methods like Hundi and Hawala played a central role. The result has been an improvement in Pakistan’s current account, stronger foreign exchange reserves, and more support for households that rely on these funds.
Despite the positive annual figure, the latest data from June reveals some emerging concerns. Remittances declined 7.6 percent compared to May, signaling a return to the seasonal pattern of inflows peaking during religious months and dipping afterward. From March to May 2025, for instance, remittances had surged and peaked at $4.1 billion, before dropping in June.
Country-wise data showed further volatility. Remittances from the US fell 10.5 percent month-on-month in June and 12.7 percent year-on-year. The UK and UAE also recorded monthly declines of 8.6 percent and 4.9 percent, respectively. Remittances from GCC countries (excluding Saudi Arabia and UAE) dropped 16.1 percent in June, and inflows from countries like Japan, Canada, and Norway also posted annual declines. Analysts warn that the heavy reliance on a few traditional corridors poses a risk, as any geopolitical or economic disruption in those countries could affect Pakistan’s external finances.
Another concern is the over-dependence on religious occasions such as Ramazan and Eid to drive remittances, which contributes to instability in monthly figures. Inflows from “other countries” fell 9 percent in June, highlighting the need for broader diaspora engagement.
Experts recommend diversifying remittance sources, enhancing skilled labour exports, and expanding digital financial services to ensure a more stable and sustainable remittance flow.
Responding to the record-breaking performance, Prime Minister Shehbaz Sharif expressed his satisfaction and praised overseas Pakistanis for their contributions. He described the $38.3 billion total as a sign of confidence in Pakistan’s economy and a reflection of the success of government policies. The Prime Minister said that the 26.6 percent increase in remittances was a positive economic indicator and reaffirmed his government’s commitment to maintaining economic stability and driving prosperity.
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