Remittances surge 12pc to $3.4bn in October

KARACHI: Remittances increased to $3.4 billion in October, up 11.9 per cent from a year earlier, sustaining strong monthly inflows in recent months, the central bank data showed on Friday.

Remittances to Pakistan went up by 7.4 per cent month-on-month (MoM) in October. These inflows exceed $3 billion for the seventh consecutive month.The cash sent from Pakistanis working abroad reached $12.96 billion in the four months of the fiscal year 2026, a rise of 9.3 per cent from $11.9 billion in the same period last year.

“One of the major reasons is the resumption of the remittance incentive scheme by the SBP as well as efforts by the commercial banks to generate FX funding to be able to meet the demand for trade finance operations,” said Mustafa Mustansir, head of research at Taurus Securities, explaining the continuous surge in remittance inflows.

“Another major reason driving remittances is the stability of the rupee,” Mustansir added.The remittances’ numbers come as Pakistan expects the International Monetary Fund’s Executive Board to approve a $1.2 billion loan tranche in early December, following a staff-level agreement reached last month.

Pakistan has experienced an increase in remittance inflows, which is helping to boost the economy and narrow the current account gap. The funds sent home by migrant workers not only support their families but also enhance the country’s external finances by providing a substantial and stable source of foreign exchange. This, in turn, improves the balance of payments and strengthens foreign exchange reserves.

According to Mustansir, the SBP anticipates that remittances will surpass $41 billion in FY26, and thus, they will continue to support the current account, absorbing the pressure from the increase in the trade deficit courtesy of higher imports as economic activity recovers.

The SBP expects the current account deficit to be in the range of zero to 1.0 per cent of GDP in FY26.

Waqas Ghani, head of research at JS Global, emphasised the critical role of remittances in maintaining the country’s external stability, especially at a time when exports are struggling. He suggests that sustaining momentum in these inflows will require consistent policy support for formal remittance channels, the expansion of digital transfer systems, and greater diversification in overseas labour markets.