Gulf uncertainty may hit remittances

Published May 31, 2026 Updated May 31, 2026 08:01am
Migrant workers walk pushing bicycles along a street in Dubai’s Satwa district in this file photo. —AFP
Migrant workers walk pushing bicycles along a street in Dubai’s Satwa district in this file photo. —AFP

KARACHI: Uncertainty in the Gulf region has started affecting Pakistan’s economy on multiple fronts, with a possible slowdown in remittances emerging as a key concern, market sources said.

They said Pakistan was facing among the highest petroleum prices in the region, which had increased the cost of production and transportation, making exports less competitive in the international market.

However, those tracking foreign exchange inflows said remittances could see a slowdown in May and may come under further pressure in the next financial year.

“We deal with the exchange market and the market is getting the feeling that despite Eidul Azha, inflows were not high. Pakistanis usually send higher remittances to celebrate Eid,” said a currency expert.

Concerns grow over Pakistani workers in UAE losing jobs

A currency dealer said remittances in April fell by almost $300 million compared to March.

March recorded inflows of $3.831 billion, the highest during FY26. “But March also included the last 10 days of Ramazan, when inflows usually remain high,” the dealer said.

Pakistan’s sources of foreign inflows have been declining for years. During the first 10 months (July to April) of FY26, net foreign direct investment fell to $1.4bn from $2bn in the same period last year, showing a decline of 31pc.

Similarly, inflows in the equity market and domestic bonds showed a net outflow of about half a billion dollars during FY26.

The cheapest source of foreign exchange inflows remains remittances sent by overseas Pakistanis.

Pakistan also raised short-term funds by launching Eurobonds worth $750m in April, while it raised 1.75bn Chinese yuan (equivalent to $250m) through Panda Bonds.

Financial experts said Pakistan’s image for borrowing from international markets had improved, but its image as a destination for foreign investment remained at the lowest ebb.

“Reports appearing on social media that Pakistani workers in the UAE are gradually losing jobs have some truth in them,” said a currency expert.

There is no official data available on workers returning home.

Market sources said Pakistani tech companies that had shifted to Dubai in large numbers before the US-Israel war on Iran were also facing difficulties as the war-like situation continued.

They claimed Dubai was among the hardest-hit business hubs during the crisis, affecting its image as a safe haven.

Those connected with Dubai-based businesses said tourism had slowed sharply, while the property market had also lost some attraction. They said Pakistanis working in these two sectors could soon find it difficult to stay there if the situation did not improve.

Published in Dawn, May 31st, 2026

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

The heat ahead
Updated 31 May, 2026

The heat ahead

Planning for hotter conditions is increasingly becoming a question of public health, economic resilience and public safety.
Dimming hopes
31 May, 2026

Dimming hopes

THE National Assembly opposition leader’s recent warning should give the ruling parties some pause. Once again, ...
No Tobacco Day
31 May, 2026

No Tobacco Day

THIS year’s World No Tobacco Day theme, announced by the WHO last October, is ‘Unmasking the appeal —...
Diplomatic resolve
Updated 30 May, 2026

Diplomatic resolve

Iran, too, must engage seriously and provide credible assurances about its nuclear programme if it wants sanctions relief and a more stable relationship with the outside world.
Weaponising water
30 May, 2026

Weaponising water

CLIMATE Minister Musadik Malik’s warning against what he described as “water aggression” indicates ...
Rabies toll
30 May, 2026

Rabies toll

EVERY year, rabies, the deadliest zoonotic disease, kills more than 59,000 people worldwide. In Pakistan, it is one...