TLDR:
- Record surge in March remittances
- SBP ups forecast to $38 billion
- Gulf demand boosts inflow spike
ISLAMABAD (The Thursday Times) — Pakistan recorded a dramatic surge in workers’ remittances for March 2025, reaching $4.05 billion—a 37% year-on-year increase from $2.95 billion in March 2024. This marks the highest monthly inflow in Pakistan’s history, with analysts pointing to seasonal Eid effects, an upturn in Gulf economies, and increased use of formal banking channels as core drivers.
March inflow breaks records
The $4.05 billion figure reported by the State Bank of Pakistan (SBP) has sent a ripple through economic circles. It’s not just a statistical jump—it’s the highest ever recorded in a single month, signalling how Pakistan’s diaspora is doubling down on remitting money back home despite mounting global uncertainties. On a month-to-month basis, the figure leapt 30% from $3.12 billion in February 2025.
The dramatic rise came largely off the back of Eid-related spending, with workers abroad sending extra cash home. But there’s more to it: data suggests an increasingly formalised banking system is drawing remittances away from the traditional hawala network and into legitimate financial channels.
Gulf region leads the charge
Remittance flows remain heavily concentrated in the Gulf region. Saudi Arabia topped the list in March 2025, with $987.3 million sent home. The United Arab Emirates followed closely with $842.1 million, driven primarily by inflows from Dubai and Abu Dhabi. The United Kingdom and United States remained key contributors, adding $683.9 million and $419.5 million respectively.
The surge aligns with an economic rebound in GCC countries. The hospitality, construction, and logistics sectors in the Gulf have picked up speed in early 2025, translating into stronger earnings and remittance potential for Pakistani workers.
Fiscal year outlook revised
Cumulatively, the first nine months of the fiscal year (Jul-Mar FY25) have brought in $28 billion, up 17.5% from $23 billion in the same period last year. In response, the SBP has now revised its full-year projection upward to $38 billion, up from a previous target of $36 billion.
This adjustment reflects not only stronger inflows from key markets but also optimism over remittance resilience amid broader economic pressures.
External reserves still under stress
Despite the upbeat remittance data, Pakistan’s foreign exchange reserves remain under strain due to ongoing debt repayments. Current reserves have slipped by $2 billion in recent months, although the SBP projects a recovery to $14 billion by June 2025—slightly above the earlier $13 billion target.
This forecast assumes successful inflows of $4–5 billion from multilateral lenders and external sources before the fiscal year closes. The SBP is counting on this capital to cushion Pakistan’s balance of payments and stabilise the rupee.
Current account and GDP expectations
The SBP believes the record-breaking remittances may generate a current account surplus, potentially the strongest in two decades. It’s a bold prediction, especially as the country continues to juggle debt repayments and import needs.
Monthly imports in March rebounded to $5.7 billion, a signal that domestic economic activity is reviving. This has prompted the SBP to forecast real GDP growth at 3% for FY25. However, this figure comes with a caveat—lower-than-expected agricultural output has forced the central bank to revise earlier, more optimistic projections.