Record-Breaking $4.1 Billion in Remittances Boosts Pakistan’s Economy
In a remarkable economic development, State Bank of Pakistan (SBP) Governor Jameel Ahmad announced that overseas Pakistanis sent home a record-breaking $4.1 billion in remittances during March 2025, the highest ever in a single month.
This milestone follows an impressive performance in February 2025 when remittances had already surged to $3.12 billion, showing strong year-on-year growth. Compared to January, March saw a 3.8% increase in inflows, which has played a critical role in strengthening the country’s foreign reserves, supporting importers, and injecting liquidity into the economy.
Between July 2024 and March 2025 — the first nine months of the fiscal year — total remittance inflows reached an impressive $28.07 billion. This marks a substantial 33% rise compared to the same period of the previous fiscal year.
Foreign Reserves Outlook and Debt Management
Speaking at the Pakistan Stock Exchange (PSX), Governor Ahmad revealed that the country’s foreign exchange reserves were expected to exceed $14 billion by the end of June 2025. He also addressed concerns around foreign debt, stating that of the $26 billion in obligations due this fiscal year, approximately $16 billion would be rolled over or refinanced. This would ease the net repayment pressure to around $10 billion.
Economic Growth and Agriculture Performance
Ahmad noted positive signals of economic recovery, with many indicators showing improved activity across sectors. However, he admitted that the GDP growth could have exceeded 4.2% if the agriculture sector had performed at last year’s levels. Due to underperformance in agriculture, the overall GDP growth is now projected at around 3%.
“Most indicators point toward a notable economic rebound,” Ahmad said. “However, the subdued growth figures are largely a result of the agriculture sector falling short of expectations.”
Regional Breakdown of Remittances
According to financial services firm AKD Securities, a significant portion of March’s remittances came from the following countries:
- Saudi Arabia: $987 million
- United Arab Emirates (UAE): $842 million
- United Kingdom (UK): $684 million
- United States (US): $419 million
These figures highlight the strong contribution of the Pakistani diaspora in key global markets.
Inflation Trends and Policy Alignment
The SBP governor also shared encouraging news on inflation, noting that the Consumer Price Index (CPI) inflation had dropped to just 0.7% in March 2025 — the lowest since December 1965. This dramatic decline surpassed both market expectations and the Ministry of Finance’s own projection of 1% to 1.5%.
He attributed the drop primarily to lower costs of essential food items like wheat, pulses, onions, and potatoes, alongside a reduction in electricity tariffs.
“This was exactly what we had forecasted and what we presented during the March 10 meeting of our Monetary Policy Committee,” Ahmad remarked.
The current figures are a welcome contrast to recent years, particularly 2023, when inflation had reached a record 38% in May due to soaring energy and food prices.
Government Reaction and Appreciation for Overseas Pakistanis
Prime Minister Shehbaz Sharif also commented on the historic remittance figure, expressing deep gratitude to the global Pakistani community. Speaking at the Overseas Pakistanis Convention in Islamabad, he called the achievement a vote of confidence in the government’s policies and the resilience of the country’s economy.
He praised the commitment and hard work of expatriates, calling them a national asset and pledging continued government support to facilitate their needs and contributions.
FAQs
1. What caused the record $4.1 billion in remittances during March 2025?
The surge was driven by increased trust in government policies, better economic sentiment among overseas workers, and seasonal factors that often influence remittance behavior.
2. How do March 2025 remittances compare to previous months?
March saw a 3.8% rise compared to January 2025 and set a new all-time record, surpassing February’s $3.12 billion.
3. Which countries sent the highest remittance amounts to Pakistan?
The largest contributions came from Saudi Arabia ($987m), the UAE ($842m), the UK ($684m), and the US ($419m).
4. What is the SBP’s projection for foreign reserves by June 2025?
Governor Jameel Ahmad stated that foreign reserves are expected to rise above $14 billion by the end of June 2025.
5. Why is GDP growth lower despite strong remittances and economic activity?
A weaker-than-expected performance in the agriculture sector limited GDP growth to around 3%, even though other economic indicators have shown recovery.
