Pakistan’s remittance inflows in July 2025 climbed to $3.21 billion, a 7.4% year-on-year rise, according to data released by the State Bank of Pakistan (SBP). However, the figure was 5.6% lower than June’s $3.4 billion, a drop attributed to seasonal normalization following the end-of-fiscal-year surge.
The strong July performance comes after a record-setting FY25, when remittances reached $38.3 billion i.e., 27% higher than the previous year and surpassing the country’s total export earnings.
Saudi Arabia Leads Remittances in July
SBP data shows Saudi Arabia as the largest source of remittances in July, contributing $823.7 million. The UAE followed with $665.2 million, including $456.8 million from Dubai. The UK sent $450.4 million, the EU $424.4 million, and the US $269.6 million. Other Gulf Cooperation Council (GCC) countries, including Qatar, Oman, and Kuwait, collectively contributed $296 million.
This distribution reflects Pakistan’s continued reliance on Gulf-based labor migrants while highlighting stable inflows from Europe and North America. Analysts note that the base has diversified, with contributions now coming from professionals, students, and freelancers alongside traditional migrant workers.
Factors Driving Remittances
Analysts attribute the robust inflows to a crackdown on informal transfer networks such as hundi/hawala, a more competitive exchange rate, and rising earnings from freelancers and remote professionals working for foreign companies. These gains helped offset stagnant outward migration caused by Gulf states tightening work visa quotas.
Risks and Strategic Outlook
Economists caution that remittances remain vulnerable to shifts in global job markets, oil prices, and host country labour policies. Heavy dependence on them also risks a “Dutch Disease” effect—drawing labour into lower-productivity sectors, boosting imports, and delaying reforms to improve export competitiveness.
Muhammad Sohail, CEO of Topline Securities, stated, “Record remittances when most needed — in a year marked by economic challenges, overseas workers stepped up. Pakistan received a record USD 38.3 billion in FY25 — up 27%.”
Experts also say policymakers should treat the current remittance boom as a strategic opportunity, not a permanent cushion. While strict enforcement to keep transfers in formal channels is essential, they argue that the real challenge lies in channeling these funds into productivity-boosting investments, such as value-added manufacturing, skills development, and global supply chain integration.
July’s figures offer a promising start to FY26, but long-term resilience will depend on how effectively Pakistan can convert these inflows into sustainable economic strength.