LAHORE, JAN 11: The Pakistan Industrial and Traders Associations Front (PIAF) has welcomed the strong growth in workers’ remittances during the first half of fiscal year 2026, describing it as a vital support for the national economy at a time of weak exports and ongoing external challenges. However, PIAF leadership has urged the government to take further policy measures to sustain and enhance remittance inflows through formal channels.
According to the State Bank of Pakistan (SBP), remittances sent by overseas Pakistanis increased by 11 percent year-on-year to $19.7 billion during 1HFY26. December inflows were particularly robust, rising 17 percent year-on-year to $3.6 billion, reflecting improved confidence in official banking channels, a stable exchange rate, and continued government incentive schemes.
PIAF Chairman Faheemur Rehman Saigol termed the performance “highly encouraging” and said the latest figures underline the resilience and commitment of overseas Pakistanis to support the country’s economy.
“PIAF strongly appreciates the contribution of overseas Pakistanis whose remittances are playing a key role in stabilising Pakistan’s external account,” Saigol said. “At a time when exports are facing pressure, remittances have once again emerged as the most dependable source of foreign exchange. The government must further strengthen the remittance ecosystem to maintain this positive momentum.”
He stressed that the narrowing gap between the interbank and informal exchange rates has helped divert inflows from hundi and hawala networks, but added that additional steps are needed to ensure long-term sustainability. These include reducing transaction costs, improving banking outreach in remote areas, and expanding digital and mobile-based remittance platforms.
Senior Vice Chairman PIAF Nasrullah Mughal highlighted the strong link between overseas employment and remittance growth. Referring to official data showing that more than 762,000 Pakistanis proceeded abroad for employment in 2025—mainly to Gulf countries—he said labour export policy must be treated as a strategic economic priority.
“Higher manpower exports directly translate into higher remittances,” Mughal said. “The government should focus on skill development, vocational training and certification so Pakistani workers can secure better-paying jobs abroad. Skilled labour not only earns more but sends more remittances through official channels.”
Mughal also called for stronger diplomatic engagement with host countries to protect workers’ rights and ensure continuity of employment opportunities, particularly in Saudi Arabia and other Gulf states.
Vice Chairman PIAF Tahir Manzoor Chaudhary cautioned that while rising remittances provide much-needed relief, overreliance on them could delay structural reforms if not managed prudently.
“Remittances are cushioning the economy, but they should not become a substitute for exports and industrial growth,” Chaudhary said. “The government must utilise remittance-driven liquidity to support productive sectors such as manufacturing, SMEs and export-oriented industries.”
He suggested launching diaspora-focused investment instruments, including foreign currency bonds, real estate projects and SME investment funds, to convert remittance inflows into long-term economic capital. Chaudhary also recommended tax incentives and simplified procedures for overseas Pakistanis willing to invest in Pakistan.
The PIAF leadership welcomed the SBP’s recent liquidity injections through open market operations and noted that relative exchange rate stability has played a positive role in encouraging remittances through legal channels.
Looking ahead, PIAF expressed cautious optimism regarding the full-year FY26 remittance target of $41 billion, which would mark one of the highest annual inflows in Pakistan’s history.
“Remittances should be treated as a strategic pillar of economic policy,” Saigol said. “With consistent reforms, transparency and investor-friendly policies, Pakistan can further enhance remittance inflows while gradually reducing its dependence on them through export diversification and industrial revival.”
