KARACHI:
Pakistan received $3.21 billion in workers’ remittances in July 2025, reflecting a 7.4% year-on-year increase from $2.99 billion in July 2024, thanks to over 2 million economic migrants who sought employment abroad due to their disillusionment with the country’s political and economic situation.
The inflows also showed a substantial 47.6% jump compared to July 2023, highlighting a strong rebound in overseas worker transfers over the past two years, according to provisional data released by the State Bank of Pakistan (SBP).
The growth was driven mainly by higher inflows from Saudi Arabia, the United Kingdom, the United Arab Emirates (UAE), and the European Union (EU). However, despite the overall improvement, the data reveals notable declines in several important remittance corridors, signalling emerging vulnerabilities for Pakistan’s external account.
The Gulf Cooperation Council (GCC) region continued to be Pakistan’s largest source of remittances. Saudi Arabia topped the list with $823.7 million in July, up 8.4% YoY from $760.1 million. The UAE followed with $665.2 million, rising 8.8% YoY, with Abu Dhabi inflows surging 37%. However, Dubai recorded a 3.1% decline, dropping to $456.8 million from $471.6 million a year earlier. Other GCC countries contributed $296 million, a modest 2.6% increase. Within this group, Oman rose 7.1%, while Kuwait posted an 11.1% drop to $62.5 million. These figures underline the GCC’s continued dominance in Pakistan’s remittance profile but also highlight intra-regional volatility.
The United Kingdom sent $450.4 million in July, up slightly by 1.6% YoY. The European Union collectively contributed $424.4 million, up 21%, with notable gains from Italy (+23.6% to $130 million), Spain (+35.7% to $72.7 million), and Ireland (+48% to $19.4 million).
Not all regions shared in the growth. Several important remittance sources saw double-digit declines. The United States fell 10.2% YoY to $269.6 million from $300.1 million. Malaysia dropped 17% to $13.4 million. Japan declined 7.5% to $4.5 million, while South Korea fell 9.7% to $9 million. Kuwait also recorded an 11.1% fall to $62.5 million. Such drops are concerning given Pakistan’s reliance on a handful of large remittance corridors.
While July’s overall numbers are encouraging, the data exposes several structural challenges for Pakistan’s remittance inflows. The country remains heavily dependent on a few markets – with Saudi Arabia, The UAE, UK, and US alone accounting for over two-thirds of total inflows. Any economic downturn, policy change, or employment shock in these countries could severely impact Pakistan’s remittance receipts. Intra-regional divergence within the GCC, such as Dubai’s decline alongside Abu Dhabi’s surge, shows how labour demand and earnings can vary widely even within the same region. The 10% drop from the US is particularly significant given its status as the fourth-largest source, potentially linked to rising living costs for migrants, changes in job markets, or greater use of informal channels. Weakness in East Asia, particularly Japan, South Korea, and Malaysia, may reflect stagnation or loss of competitiveness of Pakistani labour in these markets, possibly due to competition from other migrant-sending countries. Furthermore, GCC remittance strength is often tied to oil revenues and related employment; any sustained drop in crude prices or tightening of labour laws in the Gulf could dampen inflows.
Economists say that while the 7.4% annual growth in July is a positive signal, Pakistan must work to diversify its remittance base. Relying so heavily on a few countries is risky. The government needs to invest in worker upskilling to protect and enhance this vital source of foreign exchange. The SBP’s monthly breakdown also shows that July’s inflows were above the FY26 monthly average of $3.19 billion, suggesting a strong start to the fiscal year.
Pakistan recorded its highest-ever July workers’ remittance inflow at $3.21 billion, according to Arif Habib Limited. The historic figure also reflects a strong recovery from the dip witnessed in FY23, as overseas Pakistanis sent more funds through formal channels, supported by stable exchange rates, seasonal Eid-related inflows, and improved banking facilitation.
