Saudi Arabia takes lead as Pakistan’s remittances in May hit $3.7 billion

Pakistan received $3.7 billion in workers’ remittances in May 2025, reflecting a sharp 16 percent increase compared to April and a 13.7 percent rise year-on-year, the State Bank of Pakistan (SBP) said on Wednesday.

Saudi Arabia remained the top source, contributing $913.9 million during the month.

The May inflows pushed total remittances for the first eleven months of the current fiscal year (July–May FY2024-25) to $34.9 billion, a 28.8 percent rise from $27.1 billion during the same period in the previous fiscal year.

The upward trend follows March’s record-breaking $4.1 billion, the highest ever for a single month, and another strong inflow of $3.2 billion in April. These figures have helped ease pressure on Pakistan’s trade deficit and support its precarious foreign exchange reserves amid ongoing macroeconomic challenges.

“This is the highest level of remittances recorded in recent months,” the SBP said in a statement, attributing the improvement to stronger inflows from major remittance corridors and a rising preference for formal banking channels.

Analysts link the surge to a combination of favorable developments, including more effective exchange rate management, intensified government action against illegal money transfer systems such as hawala and hundi, and seasonal boosts linked to Ramazan and Eid.

Aside from Saudi Arabia’s $913.9 million contribution, major inflows in May came from the United Arab Emirates ($754.2 million), the United Kingdom ($588.1 million), and the United States ($314.7 million).

Remittances continue to serve as a vital source of foreign exchange for Pakistan, which is currently operating under a $7 billion IMF program while preparing to meet external debt repayments exceeding $24 billion in the next fiscal year.

Reflecting growing confidence, the central bank has revised its full-year remittance projection upward to $38 billion, expecting continued support for the country’s economic stabilization efforts.

The steady inflows, especially from Gulf countries, are providing much-needed relief amid constrained external financing options and ongoing volatility in global commodity prices. As Pakistan navigates a tight fiscal environment under IMF oversight, these remittances are increasingly seen as a cornerstone for sustaining macroeconomic stability and growth momentum.