Remittances rise; dependence deepens

According to Business Recorder, August inflows from overseas workers totalled USD3.66 billion, a 16.5 percent rise on a year earlier and 0.7 percent above July. The two-month total for FY27 came to USD7.29 billion, 14.7 percent higher than last year, following a record USD41.6 billion received in FY26. Growth was broad, and the report sees stronger UK and EU flows as useful diversification from the Gulf.

Saudi Arabia was still the top source, although its contribution slipped 4.4 percent from July despite an 18.6 percent annual gain. Inflows from the UAE rose 16.6 percent, while the UK recorded 21.6 percent growth, the EU 14.6 percent and the US 15.6 percent. Even so, the Gulf supplied around USD1.95 billion, more than half the month's total, and the four largest corridors made up over two-thirds.

The report notes that this concentration brings both strength and risk, since Gulf flows are exposed to oil-price cycles, localisation rules, visa curbs and regional security. Separately, the SBP ended two incentive schemes from July, including reimbursement of eligible transfer charges, and banks are expected to absorb those costs. Early inflows show no immediate disruption, but slower or dearer transfers could push some money back towards hundi and hawala.