• Inflows reach $38.1bn in 11MFY26 despite Gulf tensions
• Pakistanis shift wealth from UAE, Saudi Arabia

KARACHI: Pakistan received a record $4.3 billion in workers’ remittances in May, with inflows from overseas Pakistanis rising more than 20 per cent month-on-month and 15.4pc year-on-year despite continuing geopolitical tensions in the Gulf region.

The latest figures have strengthened expectations that total remittances will surpass the official target by the end of FY26 on June 30. The government had initially projected inflows of $41bn before revising the target to $40bn.

According to data released by the State Bank of Pakistan (SBP) on Wednesday, remittances totalled $38.109bn during July-May FY26 compared to $34.829bn in the corresponding period of the previous fiscal year, reflecting growth of 9.2pc. The increase, however, was slower than the 28.8pc growth recorded in FY25.

The sustained rise in remittances has come despite instability in the Middle East, where periodic attacks and security concerns continue to affect several countries. During the first 11 months of the current fiscal year, inflows from the region increased by around $1bn to reach $20bn.

Some analysts specialising in Gulf economies believe uncertainty linked to the ongoing conflict has prompted affluent Pakistanis in the United Arab Emirates and other Gulf states to reassess the safety of holding liquid assets in the region. They say a number of Pakistanis have returned home, while others have transferred funds and investments back to Pakistan.

Saudi Arabia remained the largest source of remittances during July-May FY26, with inflows amounting to $8.953bn, up 5.1pc from a year earlier. Remittances from the UAE rose 12.7pc to $8.014bn, narrowing the gap with Saudi Arabia and reinforcing indications of stronger financial transfers from Pakistanis residing there.

Financial sector experts described the growth in remittances from the UAE as particularly significant, saying it supports reports that some overseas Pakistanis have begun shifting a larger share of their wealth back to Pakistan.

The United Kingdom remained the third-largest source of remittances, with inflows increasing 8.3pc to $5.810bn during the first 11 months of 2025-26.

A notable trend has been the rapid growth in remittances from European Union countries. Over the past five years, inflows from the bloc have expanded sharply and now exceed those from several traditional Gulf markets. During July-May FY26, remittances from EU countries reached $4.811bn, up 17.3pc year-on-year, the highest growth rate among major remittance-sending regions. By comparison, inflows from GCC countries other than Saudi Arabia and the UAE stood at $3.613bn.

The only major decline was recorded in remittances from the US, which fell 3.2pc to $3.327bn during the period under review.

Meanwhile, remittances from Australia crossed the $1bn mark for the first time, surging 41.5pc in 11MFY26.

Overall, inflows from the Middle East amounted to $20.13bn, accounting for 53pc of Pakistan’s total remittances during the period.

While remittances continue to provide vital support to the external account, economists remain concerned about Pakistan’s dependence on overseas inflows. They note that export growth has remained insufficient to meet the country’s import and debt-servicing requirements.

The widening trade deficit, estimated at around $35bn, underscores persistent structural weaknesses in an economy that remains heavily reliant on imported inputs.

Published in Dawn, June 11th, 2026