ME conflict may reduce remittances by $3-4b

Rising tensions in the Middle East may negatively affect Pakistan's economy as well as overseas Pakistanis and the annual inflow of remittances could decline by $3-4 billion.

There was a likelihood of reduced overseas employment opportunities and a decline in the arrival of remittances, said the Pakistan Institute of Development Economics (PIDE) while suggesting expanding job opportunities in new countries.

These concerns were expressed in a report issued by PIDE. Officials stated that the report warned that tensions in the Middle East posed risks to Pakistan's economy and overseas workforce as nearly six million Pakistanis were currently working in the region.

Every year, around 700,000 to 800,000 Pakistanis travel to Gulf countries for employment. If the conflict continues, about 500,000 Pakistani expatriates may not be able to go abroad for work in 2026.

According to officials, there are also fears that an additional 500,000 Pakistanis may return from these countries. Such an influx could increase pressure on Pakistan's domestic job market.

The report also notes that excessive reliance on Gulf countries poses risks for the economy as the Middle East conflict could affect Pakistan's economic recovery.

Officials said that the report highlighted that remittances accounted for nearly 10% of Pakistan's economy, while Saudi Arabia and the United Arab Emirates (UAE) remained the major labour markets for Pakistani workers. PIDE, therefore, recommended increasing employment opportunities in new countries.