GCC remains Pakistan’s top remittance source as inflows hold steady

KARACHI: The Gulf Cooperation Council (GCC) continues to dominate Pakistan’s remittance landscape, with Saudi Arabia and the United Arab Emirates (UAE) emerging as the top contributors, accounting for nearly half of the country’s monthly inflows from overseas workers.

In June 2025, Pakistan received $3.41 billion in total remittances, down slightly from a peak of $4.05 billion in March and $3.685 billion in May. But the inflows still showed resilience amid global economic uncertainty. Of this, Saudi Arabia contributed $823.2 million, while the UAE sent $717.2 million, according to central bank data released on Wednesday.

Per Dr Khaqan Najeeb, former adviser to the Ministry of Finance, that Pakistan’s significant remittance growth is predominantly fuelled by the GCC, particularly Saudi Arabia and the UAE is a result of the concentration driven by historical labour migration, policy inertia and a skill mismatch limiting access to other high-value markets.

By comparison, inflows from the US stood at $281.2 million in June, while the UK contributed around $537.6 million, underscoring the regional skew of Pakistan’s labour diaspora.“This lack of diversification [in the countries of remittance-origin] is further compounded by complex visa regimes in developed nations and insufficient proactive market engagement,” said Najeeb.

In FY25, remittances from the US stood at $3.7 billion, a 5.4 per cent increase from the previous fiscal year.Macroeconomist Ammar Habib Khan shared that the reason for continued growth in remittances from the GCC region is that Pakistan’s labour force is largely concentrated there, and is also low value-add, which means they do not have the necessary skills required to diversity to other regions.

When asked if Pakistan’s political environment plays any role in a slowdown in remittances from countries like the US, Ammar disagreed and added that around “75 per cent of our labour force comprises labourers, drivers and masons, who can only find jobs in the GCC region.”

Cumulatively, remittances from Saudi Arabia in FY25 reached $9.3 billion, while the UAE provided $7.8 billion, making the GCC bloc an indispensable financial lifeline for Pakistan’s external sector.

Mustafa Fahim, an investment banker working in the Middle East, said that while most blue-collar workers from Pakistan have a higher chance of finding an employment in the GCC, there is also an uptick in the number of high-skilled, Pakistan-origin workers migrating to the Middle East for better work opportunities.

“Per the latest trend, a lot of British Pakistanis and Canadian Pakistanis have moved to the Middle East, Saudi Arabia and the UAE in particular, due to two reasons: geographical proximity to their country of origin and tax-free income.” This, he said, increased the number of Pakistani and Pakistan-origin, dual-national workers in the GCC, who may send higher remittances back home.

He also added that economically, GCC countries have grown better than most Western countries and are hence attracting many skilled workers. “I think this economic growth is a prime reason for the concentration of labour in the GCC and is being reflected in the remittances received from this region.”