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