Remittances steady, but war risks loom

KARACHI: Remittances remained steady in February, with Pakistan receiving $3.3 billion from overseas workers, even as tensions in the Middle East intensified before erupting into war at the end of the month.

The State Bank of Pakistan (SBP) reported on Tuesday that inflows from all major destinations where Pakistanis are employed, including the Middle East, remained stable.

However, currency experts believe remittances could be affected in March as the conflict has already disrupted the economies of oil-producing Arab countries. For the past 12 days, oil supplies have either stopped or remained well below normal levels.

Pakistan has also felt the impact, as the government recently increased petroleum prices by Rs55 per litre, while a federal minister said the initial proposal had been to raise prices by Rs110 per litre. If the war continues, oil prices could rise further.

July-February inflows rise 10.5pc to $26.5bn

At the same time, experts warn that prolonged conflict could lead to job losses among overseas Pakistanis, which would significantly affect remittance inflows. Pakistan expects to receive $40bn in remittances during FY26, and inflows so far remain broadly in line with expectations.

During July-February FY26, the country received $26.5bn, reflecting a 10.5 per cent increase compared to the same period last year, although lower than the 32pc growth recorded a year earlier.

The largest inflows came from Saudi Arabia, which rose 4.6pc to $6.163bn from $5.897bn during the same period last year. However, due to the blockage of the Strait of Hormuz, Saudi Arabia has been unable to export about 80pc of its oil, while its major oil producer Aramco has reportedly reduced production to about half capacity.

The second-largest inflows came from the UAE, increasing 12pc to $5.44bn. Remittances from the United Kingdom ranked third, reaching $4bn, up 13pc.

The highest growth was recorded from European Union countries, where remittances rose 23.5pc to $3.5bn, significantly higher than growth from Gulf Coop­eration Council countries, from where remittances increased 5.3pc to $2.5bn.

While the Middle East remains the main source of remittances, the inflow base has gradually diversified, with increasing contributions from the UK, the US — which sent $2.3bn during July-February FY26 — and other countries.

Overall, remittances from Arab countries totalled $14.136bn during the first eight months of FY26, accounting for 53.3pc of Pakistan’s total inflows during the period.

Published in Dawn, March 11th, 2026