Remittances hit $3.8bn in March despite Middle East tensions

KARACHI: Pakistan recorded its highest monthly remittance inflow of the current fiscal year in March, receiving $3.8 billion, despite ongoing tensions in the Middle East, according to data released by the State Bank of Pakistan (SBP) on Wednesday.

The inflow marked a 17 per cent increase compared to February, although it remained 5 per cent lower than the $4 billion recorded in March last year. Officials and currency experts attributed the surge partly to Ramazan-related transfers, while noting that remittances remained resilient despite the regional conflict.

Contrary to concerns, inflows from Gulf countries showed positive growth, indicating that the war had not disrupted remittance channels. Experts observed that Pakistani workers in the region largely remained in place, with visa applications to countries like the UAE continuing at a steady pace.

Cumulatively, remittances during July–March FY26 reached $30.321 billion, reflecting an 8.2 per cent increase compared to $28 billion in the same period last year. The steady inflows continue to play a critical role in supporting Pakistan’s external account by helping finance the trade deficit, service external debt, and maintain foreign exchange reserves.

The SBP also highlighted upcoming external obligations, stating that $1.4 billion had already been paid against Eurobond maturities, while an additional $3.5 billion repayment to the UAE is due this month. The combined outflow of $4.9 billion is expected to put pressure on reserves, which stood at around $16.5 billion as of March 27.

Financial analysts noted that Pakistan currently faces constraints in accessing international capital markets, with bond issuance and commercial borrowing becoming increasingly difficult due to elevated risk perceptions. They added that a sustained ceasefire in the Middle East could ease pressure on the economy, particularly by stabilising global oil and gas prices, which directly impact Pakistan’s import bill.

Country-wise, Saudi Arabia remained the largest source of remittances, contributing $7.086 billion during the nine-month period, followed by the UAE at $6.267 billion, which posted a notable 10 per cent increase. Inflows from the United Kingdom rose 8.4 per cent to $4.6 billion, while European Union countries recorded the highest growth rate of 20 per cent with $3.9 billion. Remittances from other GCC countries reached $2.891 billion, up 5 per cent, whereas inflows from the United States declined by 5.7 per cent to $2.661 billion.

Analysts believe that once stability returns to the Gulf region, reconstruction and economic activity could further boost employment opportunities for Pakistani workers, potentially strengthening remittance inflows in the months ahead.