Saudi Arabia leads as Pakistan sees 29% year-on-year growth in worker remittances for September

Pakistan recorded a remarkable year-on-year growth of 29 per cent in workers’ remittances, with inflows reaching $2.8 billion in September, according to the central bank.

The highest contributions came from Saudi Arabia and the United Arab Emirates, which are significant sources of funds for the country’s struggling economy.

In September 2024, the remittance inflows were primarily sourced from several countries, including Saudi Arabia ($681.3 million), the United Arab Emirates ($560.3 million), the United Kingdom ($423.6 million), and the United States ($274.9 million), as reported by the central bank.

For the first quarter of the fiscal year 2025 (Q1-FY25), Pakistan received a total of $8.8 billion in remittances, marking a significant growth of 38.8 per cent compared to the same quarter last year (Q1-FY24).

To further encourage the flow of remittances into the country, the State Bank of Pakistan (SBP) recently announced a threefold increase in monetary incentives for exchange companies. 

Effective October 1, the bank increased incentives to Rs4 per US dollar for exchange companies on home remittances. According to the SBP’s circular, exchange companies (ECs) will receive a fixed payment of Rs2 for each US dollar of home remittances surrendered to designated banks. 

Additionally, ECs will earn Rs3 for each incremental US dollar surrendered, aimed at encouraging growth in home remittances up to 5 per cent or $25 million (whichever is lower) compared to the previous year. For incremental remittances exceeding 5 per cent or over $25 million compared to the prior year, ECs will be compensated at Rs4 per US dollar.

These measures aim to enhance remittance inflows, which are critical for Pakistan's economic stability and growth. These inflows play a vital role in bolstering foreign exchange reserves, stabilising the balance of payments, and supporting the Pakistani currency.