Pakistan recorded $41.6 billion in workers’ remittances during the 2026 fiscal year (FY26), marking the highest annual total in the country’s history. According to data released by the State Bank of Pakistan (SBP) on Thursday, this figure represents an 8.6 per cent increase over the previous fiscal year, surpassing the government’s revised target of $40bn.
Drivers of Record Remittance Growth
The record inflows were attributed to the continued contributions of overseas Pakistanis. Khurram Schehzad, Adviser to the Finance Minister, stated on X that the milestone reflects “unwavering confidence” from the diaspora and reinforces the nation’s external sector resilience. He noted that the growth observed over the last three years has been “phenomenal.”
The inflows occurred despite regional market concerns regarding the impact of the US-Iran war, which began on February 28. A 2024 study by the Asian Development Bank (ADB) suggests that Pakistani migrants typically increase remittances when domestic economic conditions show signs of improvement, indicating a positive correlation between these inflows and local economic activity.
While FY26 saw record-breaking annual totals, monthly performance fluctuated; June recorded $3.47bn in inflows, an 18.35pc decline from the record $4.25bn reached in May.
Sources and Regulatory Shifts
Saudi Arabia and the United Arab Emirates remained the primary contributors to the June totals, providing $829.6 million and $792.3m, respectively. Significant inflows were also reported from the United Kingdom ($514.9m), the United States ($296.8m), Italy ($121.1m), and Oman ($110.8m).
The SBP recently moved to phase out two incentive schemes for banks aimed at boosting remittances, a decision made after inflows reached levels that drew attention from the International Monetary Fund (IMF). While some banks expressed disappointment, financial sector experts suggest the removal of these incentives is unlikely to significantly impact the profitability of the banking sector.
The shift in incentive structures indicates that the SBP is recalibrating its support mechanisms as remittance volumes stabilize at higher levels. With the government having already surpassed its initial $41bn projection, the focus may now shift toward maintaining these buffers without the need for targeted bank incentives.
Growth Trends Compared to Previous Years
Although the FY26 total is a record, the 8.6pc year-on-year growth rate is lower than the 26.6pc growth recorded for FY25 and the 10.7pc increase seen in FY24. Future performance may depend on global economic conditions and the continued influence of migration patterns on remittance stability. Analysts expect the SBP to continue monitoring these inflows closely as part of its broader macroeconomic strategy.
Frequently Asked Questions
What was the total amount of remittances received in FY26?
Pakistan received a record $41.6 billion in workers’ remittances in FY26.
Which countries were the largest sources of remittances in June?
Saudi Arabia and the United Arab Emirates were the top sources, contributing $829.6 million and $792.3m, respectively.
Why did the SBP abolish incentive schemes for banks?
The SBP ended the schemes after remittance volumes reached a level that came under the radar of the International Monetary Fund (IMF).
How might the removal of bank incentives affect the country’s remittance trajectory in the coming months?
