Pakistan FY25 overseas remittances $38.3B, up 26.6% YY

Pakistan FY25 overseas remittances $38.3B, up 26.6% YY

Pakistan's overseas remittances have reached $38.3 billion in the fiscal year 2024-25, marking a significant 26.6% year-over-year increase, according to the latest data from the State Bank of Pakistan (SBP). This impressive growth is largely attributed to the contributions of foreign exchange companies, which have played a pivotal role in supporting the country's remittance inflows.

Foreign exchange companies have contributed approximately $5 billion to Pakistan’s remittances by the end of the fiscal year 2024-25, as highlighted by the Exchange Companies Association of Pakistan (ECAP). Zafar Paracha, Secretary General of ECAP, noted that $450 million was sold to banks in June alone, underscoring the growing importance of these companies in maintaining exchange rate stability. The inclusion of exchange companies in the Pakistan Remittance Initiative (PRI) by the SBP has been welcomed by the sector, as it provides equal incentives with banks.

Under the new arrangement, exchange companies will receive Rs22 per dollar transaction, a substantial increase from the previous Rs2 per transaction. This new incentive structure is expected to drive further remittance inflows in the fiscal year 2025-26. The total remittances handled by exchange companies in FY25 is expected to reach $5 billion, surpassing the revised target of $38 billion.

During the first 11 months of FY25, Pakistan received $35 billion in remittances. The final figure is expected to exceed the revised target of $38 billion, with the support of exchange companies. The country's remittance inflows have been bolstered by various factors, including the new incentive structure, which aims to facilitate easier and more cost-effective remittance transactions.

While Pakistan's exports fell short of the annual target for fiscal year 2024-25, reaching $32.106 billion against a $32.341 billion goal, the remittance sector has shown remarkable resilience. The trade deficit widened to $26.274 billion, primarily due to surging imports, but the country's external account remains robust, supported by strong remittance inflows.

Pakistan's reliance on imported raw materials for value-added exports has been a challenge, but the government's initiatives to reduce trade barriers and support the trade sector have shown promising results. The slashing of charges for export and transhipment containers by 50% is expected to further incentivize outbound trade flows and support the country's economic growth.

In conclusion, Pakistan's remittances have surged to $38.3 billion in FY25, driven by the significant contributions of foreign exchange companies and the new incentive structure. The country's external account remains robust, supported by strong remittance inflows, despite challenges in the trade sector. As the government continues to implement supportive measures, Pakistan is poised for further economic growth and stability.

References:
[1] https://profit.pakistantoday.com.pk/2025/07/07/exchange-companies-contribute-5-billion-to-pakistans-remittances-in-fy25/
[2] https://timesofindia.indiatimes.com/business/international-business/pakistan-trade-data-exports-miss-target-for-fy25-deficit-widens-on-surging-imports/articleshow/122200643.cms