Introduction:
Pakistan’s recent macroeconomic stabilisation has been supported less by improvements in domestic productivity than by the resilience of its overseas workforce. Workers’ remittances have emerged as the country’s largest and most dependable source of non-debt external financing. During the first eleven months of FY2025–26, remittance inflows exceeded US$38 billion, representing an increase of more than 9 percent over the corresponding period of the previous year.[1] Monthly inflows during May 2026 crossed the US$4 billion threshold for only the second time in Pakistan’s history amounting to US$4.25 billion,[2] reflecting the continued commitment of overseas Pakistanis despite an increasingly uncertain global environment.
These record inflows have provided Pakistan with valuable macroeconomic breathing space. For millions of households, remittances continue to finance education, healthcare, housing, and daily expenditures while reducing poverty and mitigating the impact of rising living costs. However, the growing importance of remittances also reflects a deeper structural imbalance. Rather than complementing a productive domestic economy, remittances have increasingly compensated for weak exports, limited industrial competitiveness, persistently low foreign direct investment (FDI), and insufficient job creation.
