Pakistan remittances FY26 reached a record $41.6 billion, the State Bank of Pakistan (SBP) confirmed this week, a milestone that helped keep the country’s current account in surplus. Yet even as the government celebrated, independent analysts and market watchers are flagging a clear warning: the conditions that drove this record are weakening, and the $44 billion target set for FY27 may not be easy to hit.
Pakistan Remittances FY26: The Record in Numbers
Workers’ remittances rose 8.6% to $41.6 billion in fiscal year 2025-26, compared with $38.3 billion in FY25, while June inflows stood at $3.5 billion, the State Bank of Pakistan said. That makes FY26 the strongest year on record for overseas worker transfers into Pakistan.
On average, Pakistan received $3.46 billion in workers’ remittances each month during the fiscal year, underscoring the continued contribution of overseas Pakistanis to the country’s economy.
Remittances in Pakistan increased to $4,251.40 million in May from $3,537 million in April 2026, the May spike was partly driven by Eid season sending. Remittances stood at $3.5 billion in June 2026, up 2% from the same month last year but down 18.3% from May. Topline Research attributed the month-on-month decline primarily to a higher base in the previous month amid the festive season.
Where the Money Came From
Saudi Arabia remained the largest source of remittances, with Pakistani expatriates sending $9.75 billion, followed by the United Arab Emirates with $8.80 billion, the United Kingdom with $6.32 billion, the European Union with $5.22 billion, other Gulf countries with $3.93 billion, and the United States with $3.62 billion.
Pakistan is among the world’s largest recipients of workers’ remittances, with millions of its citizens employed overseas, particularly in the Gulf. The money they send home has long served as a crucial source of foreign exchange, helping support household incomes and cushion the country’s external finances during periods of economic strain.
Remittances once again did the heavy lifting for the external account. In FY26, they were comfortably higher than the country’s net trade deficit in goods and services.
Why Analysts Are Cautious About FY27
Despite the record, the mood among financial analysts is cautious. The three main risks are: slowing worker outflows, the removal of SBP incentive schemes, and growing dependence on a small number of markets.
Worker Departures Are Slowing
Pakistan sent 762,499 workers abroad in 2025, while the cumulative number of registered overseas workers reached 15.13 million between 1971 and mid-2026. That 2025 figure is noticeably below the 2023 peak. Fewer than 230,000 Pakistanis left for work abroad in 2021; by 2023, that figure had reached 862,625 in a single year, according to the Bureau of Emigration and Overseas Employment (BEOE). The drop from 862,625 in 2023 to 762,499 in 2025 means the pipeline of new overseas workers is shrinking.
Analyst AAH Soomro put it plainly: “The growth is likely to taper down from the last three years growth rate. Government is unwinding remittances and outflow of migrants is slowing.” He added that the $44 billion FY27 target is ambitious.
SBP Ends Two Key Incentive Schemes
A big structural change arrived on July 1, 2026. SBP discontinued a government-backed incentive scheme that reimbursed banks for telegraphic transfer charges on workers’ remittances. It also decided to discontinue the Sohni Dharti Remittance Program (SDRP), ending the incentive scheme that rewarded overseas Pakistanis for sending remittances through formal banking channels.
From July 1, remittances will still remain free for senders and families receiving them, but the government will no longer pick up the bill. Banks will now have to bear that cost themselves. That is fair, because they already gain from remittance flows. The real test is whether they can keep the service fast, easy and competitive. If they make it costly or complicated, some money can quickly move back to hundi and hawala.
Heavy Dependence on a Few Markets
The country remains heavily dependent on a few markets, with Saudi Arabia, the UAE, UK, and US alone accounting for over two-thirds of total inflows. Any economic downturn, policy change, or employment shock in these countries could severely impact Pakistan’s remittance receipts.
GCC remittance strength is often tied to oil revenues and related employment; any sustained drop in crude prices or tightening of labour laws in the Gulf could dampen inflows. For a deeper look at how regional shocks affect Pakistan’s economy, see our earlier piece on how the Iran war hit Pakistan’s tech and energy costs.
What Pakistan Must Do to Protect Remittance Flows
Experts say Pakistan cannot afford to treat record Pakistan remittances FY26 as a guaranteed baseline. Several steps are needed.
- Upskill workers: While the 7.4% annual growth in July is a positive signal, Pakistan must work to diversify its remittance base. Relying so heavily on a few countries is risky. The government needs to invest in worker upskilling to protect and enhance this vital source of foreign exchange.
- Keep formal channels competitive: With SBP incentives gone, banks must keep transfer costs low and services fast, or workers will shift back to informal hawala networks.
- Diversify destination countries: Weakness in East Asia, particularly Japan, South Korea, and Malaysia, may reflect stagnation or loss of competitiveness of Pakistani labour in these markets, possibly due to competition from other migrant-sending countries. The government should open new labour corridors in Europe, East Asia and beyond.
- Channel remittances into investment: The bigger lesson remains unchanged. Remittances are Pakistan’s strongest external cushion, but they are not a development model. Roshan Digital Accounts are one tool already helping, by early 2026, over 900,000 RDA accounts had been opened, with cumulative inflows surpassing $12-13 billion.
Pakistan IT exports are one bright spot that could reduce dependence on labour remittances over time. The country crossed $4.5 billion in IT exports in FY26, showing that knowledge-based income is growing alongside worker-based transfers.
Frequently Asked Questions
How much did Pakistan receive in remittances in FY26?
The central bank said cumulative remittances reached the all-time high level of $41.6 billion during fiscal year 2025-26, surpassing the previous year’s mark of $38.3 billion.
Which country sends the most remittances to Pakistan?
Saudi Arabia is the largest source, with Pakistani expatriates sending $9.75 billion in FY26, followed by the UAE with $8.80 billion and the UK with $6.32 billion.
Why might Pakistan remittances fall in FY27?
Three main reasons: fewer new workers leaving for overseas jobs (departures dropped from 862,625 in 2023 to 762,499 in 2025), the SBP ending its remittance incentive programs in July 2026, and continued heavy reliance on Gulf economies that are tied to oil prices. The $44 billion FY27 target is seen by analysts as ambitious.
What is the Roshan Digital Account and how does it help?
Designed exclusively for overseas Pakistanis, the Roshan Digital Account (RDA) allows non-resident Pakistanis to open and operate Pakistani bank accounts digitally from abroad, without physical presence. Accounts can be funded solely through formal remittances and offer investment opportunities in Naya Pakistan Certificates, government securities, and other avenues. It is one of the main tools keeping remittances in formal banking channels.
