Remittances from Overseas Pakistanis Show Growth, Further Increase Expected: Expert Analysis

The Ministry of Finance has been reporting a steady increase in remittances sent by overseas Pakistanis, which is a positive development for Pakistan. However, the question arises: what are the reasons behind this growth, and is there still potential for further increase?

According to Mohammad Adnan Paracha, Vice President of the Overseas Employment Promoters Association, remittances have been on the rise for the past four months. He anticipates that remittances will continue to grow and expects them to reach $35 billion by June 2024-25.

Paracha explained that remittances tend to rise during the holy month of Ramadan, followed by Eid, with a significant increase in inflows. He pointed out that in January alone, the remittances closed at $3 billion, and the trend suggests that by the end of the fiscal year, the total remittances could reach $35 billion.

Paracha attributed the increase in remittances to growing confidence among overseas Pakistanis in Pakistan’s economy. He highlighted that overseas Pakistanis now recognize the importance of investing in Pakistan, as new investment platforms that were unavailable a year ago are now accessible.

He also mentioned that remittances from Saudi Arabia currently account for 25-27% of the total, while those from the UAE make up 20-21%. He believes that the contribution from Saudi Arabia could increase to 35-37%. To further boost these inflows, Paracha suggested that the government of Pakistan address certain issues faced by the labor force in Gulf countries.

He emphasized that the overall remittance volume is actually higher, but a decline had occurred earlier, which has now started to reverse. The crackdown on illegal remittance channels (hundi and hawala) has also contributed to this recovery. Additionally, the stabilization of the Pakistani rupee against the US dollar has played a key role, as previously fluctuating exchange rates had opened the door for informal remittance channels.

Paracha proposed that if Pakistan’s government improves its policies and introduces more targeted initiatives, there is significant room for further growth. He recommended launching specific projects for workers—especially the 70% who are laborers—creating a seamless mechanism for them to send money back home with just a click, ensuring rapid delivery within half an hour. He also called for affordable housing schemes and guaranteed investment options for overseas Pakistanis, particularly in areas where a large number of Pakistanis are working abroad.