Remittances remain stable in February despite Middle East tensions

KARACHI: Pakistan's remittances held steady in February, with the country receiving $3.3 billion from overseas workers, according to figures released by the State Bank of Pakistan (SBP) on Tuesday. The data shows that inflows from all major regions where Pakistani expatriates are employed, including the Middle East, remained consistent despite escalating tensions in the region that culminated in war at the end of the month.

Currency experts have cautioned that remittance flows may face challenges in March, as the ongoing conflict has already disrupted the economies of oil-producing Arab nations. For the past 12 days, oil supplies in these countries have either ceased or remained significantly below normal levels. This disruption has also impacted Pakistan domestically, with the government recently raising petroleum prices by Rs55 per litre. A federal minister noted that the initial recommendation had been to increase prices by Rs110 per litre.

Experts warn that if the conflict persists, oil prices could rise even further, potentially affecting remittance inflows. The SBP reported that total remittances for the July-February period increased by 10.5 percent, reaching $26.5 billion compared to the same period last year. However, the stability of these inflows remains uncertain as the regional situation develops.

While remittances have so far remained resilient, analysts emphasize the importance of monitoring the evolving situation in the Middle East, as prolonged instability could have broader economic implications for Pakistan, particularly in terms of foreign exchange reserves and domestic fuel prices.