Remittances open FY27 at $3.6b

Up 13% as UK, US lead gains; Sindh, Balochistan miss out as inflows rise

KARACHI:

Workers' remittances opened the new fiscal year on a firm footing, reaching $3.63 billion in July 2026 – an increase of 13% from the same month last year and 4.5% higher than June. The inflows offer an early positive signal for Pakistan's external accounts and household purchasing power after a solid FY26 performance.

According to provisional data released by the State Bank of Pakistan, July's $3.631 billion compared with $3.215 billion in July 2025 and $3.475 billion in the preceding month. The figure marks a constructive start to FY27, which began on July 1, following a full fiscal year in which remittances rose 8.6% to $41.58 billion.

Remittances have become the backbone of Pakistan's economy; however, the benefits are not equally distributed across the country. The southern region, comprising of Sindh and Balochistan, has a negligible share of this windfall, as their governments have failed to empower their citizens to take advantage of this source of income.

Saudi Arabia remained the single largest source, contributing $913.9 million, up 10.9% year-on-year. The United Arab Emirates followed with $737.3 million, a gain of 10.8%. Together the two Gulf economies accounted for a substantial share of total inflows, underlining the continued importance of the traditional corridors even as growth broadened across other destinations.

Inside the UAE, the picture was mixed. Dubai recorded a sharp 26% rise to $575.5 million, while Abu Dhabi saw a 26% decline to $135.4 million. Sharjah and other emirates made smaller contributions. The divergence within the federation points to shifting labour market or residency dynamics that merit closer tracking in coming months amid the US-Iran war.

Among major corridors, the United Kingdom posted the strongest percentage growth, with remittances climbing 23.4% to $555.5 million. Inflows from the United States rose 17.6% to $317.2 million. The robust gains from these two Western sources helped lift the overall total and reduced reliance on any single region.

Other GCC countries collectively sent $336.1 million, up 13.6%. Bahrain, Kuwait, Qatar and Oman all recorded positive growth, though at varying rates.

European Union countries contributed $462.1 million, an 8.9% increase, with notable rises from Italy, Spain, Ireland and several smaller markets. Australia and Canada also posted healthy year-on-year gains of 5.5% and 8.8% respectively, indicating gradual geographic diversification beyond the classic Gulf-UK-US triangle. The July reading sits comfortably above the previous fiscal year's monthly average of $3.19 billion. It also continues the upward trajectory seen through much of FY26, when remittances provided steady support to the current account and foreign exchange reserves. Higher inflows typically translate into improved household liquidity, particularly in rural and semi-urban areas that depend on overseas earnings for consumption and investment.

From November 2020 to July 2026, total net investments through Pakistan's Roshan Digital Accounts (RDA) reached $2,151 million. These comprise Conventional Naya Pakistan Certificates at $684 million, Islamic NPCs at $1,316 million, Roshan Equity Investments of $151 million, and other liabilities of $76 million. Account balances stand at $699 million. Overall, the net repatriable liability has grown to $2,927 million. Month-on-month figures for July 2026 show further increases in NPCs and equities, slightly offset by lower balances, reflecting sustained overseas Pakistani interest in these investment avenues amid evolving economic conditions.

Market observers view the early FY27 performance as encouraging for external sector stability.

Topline Securities projected the country's worker remittances will total $40.1 billion in FY27 (July 2026–June 2027).

Sustained double-digit growth, if maintained, would ease pressure on the import bill and support the rupee. At the same time, the concentration in a handful of corridors means any geopolitical or labour-market disruption in the Gulf could still feed through quickly to the monthly totals. Meanwhile, the Pakistani rupee edged higher against the US dollar on Monday, closing at Rs277.70 after a gain of one paisa from Friday's Rs277.71.

The dollar hovered near a two-month low against major currencies as markets awaited US inflation figures for clues on the Federal Reserve's rate path.

Furthermore, gold prices in Pakistan rose on Monday, tracking gains in the global market.

According to rates released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the local price of gold per tola climbed Rs800 during the day to close at Rs457,366. Ten-gram gold was quoted at Rs392,091, up Rs685.

On Saturday, the per-tola rate had advanced Rs2,200 to finish at Rs456,536. Internationally, gold gained $8 to settle at $4,349 per ounce, carrying a $20 premium.

Silver also edged higher in the domestic market, rising Rs77 to Rs6,903 per tola.