Overseas Pakistanis sent a record $41.6 billion in remittances during July to June FY26, according to State Bank of Pakistan data released on Thursday.
The inflows rose 9% from $38.3 billion in the previous fiscal year. Remittances stood at $3.475 billion in June 2026. They fell 18% from May but rose 2% from June last year.
Analysts said the annual increase came from stronger formal banking flows, exchange rate stability and higher overseas employment.
Saad Hanif, Head of Research at Ismail Iqbal Securities, said reforms in exchange companies helped shift money away from hawala and hundi channels.
“The corridor data reflects this breadth, with UAE up 12%, EU up 15% and others up 20% year-on-year, while incentive schemes provided additional support through the year,” he told Business Recorder.
Formal channels support inflows
Waqas Ghani, Head of Research at JS Global Capital, said higher overseas employment supported inflows during the year. He also pointed to continued migration toward formal banking channels and stable exchange rate dynamics.
Sana Tawfik, Head of Research at Arif Habib Limited, gave a similar view. She said exchange rate stability and a narrow gap between interbank and open market rates encouraged legal transfers.
She added that administrative action against illegal channels also helped. A rising number of Pakistani workers abroad also contributed to stronger inflows.
Remittances remain vital for Pakistan’s external account. They support household income, foreign exchange reserves and domestic consumption.
“The record inflows remain the anchor of Pakistan’s external account, fully absorbing a trade deficit that widened 21.6% year-on-year to $39.5 billion and keeping the current account in surplus,” Hanif said.
He added that SBP reserves rose to $18.4 billion from $13 billion a year earlier, despite heavy debt repayments. He said this helped rupee stability and created room for eventual monetary easing.
Saudi Arabia leads June inflows
Saudi Arabia remained the largest source of remittances in June 2026. Overseas Pakistanis there sent $830 million. The figure was up 1% from June last year but down 19% from May.
The UAE sent $792 million in June. That was 10% higher than last year but sharply lower than May.
Remittances from the UK stood at $515 million. This was down 20% from May. Pakistanis in the US sent $297 million, showing a 15% monthly decline.
EU countries sent $415 million in June. That was down 11% from May.
SBP Governor Jameel Ahmad had earlier said remittances would likely cross $41.5 billion in FY26. He also projected inflows of $44 billion in FY27.
The outlook now depends on Gulf labour markets, regional tensions and the impact of discontinued incentive schemes. SBP recently ended the telegraphic transfer reimbursement scheme and the Sohni Dharti Remittance Program.
