Rising geopolitical tensions in the Middle East could significantly affect Pakistan’s economy and overseas workforce, potentially reducing annual remittance inflows by $3 billion to $4 billion, according to a report by the Pakistan Institute of Development Economics.
The study warned that prolonged conflict in the region may limit overseas employment opportunities for Pakistani workers, many of whom are employed in Gulf economies. Nearly six million Pakistanis currently work in Middle Eastern countries, making the region the largest destination for the country’s migrant labour.
Each year, around 700,000 to 800,000 Pakistanis travel to Gulf states for employment. However, the report estimates that as many as 500,000 workers may fail to secure overseas jobs in 2026 if the crisis persists and economic activity in the region slows.
Officials also raised concerns that an additional 500,000 Pakistani workers could return from Gulf countries if businesses reduce operations due to regional instability, adding pressure to Pakistan’s domestic labour market.
Remittances remain a critical pillar of Pakistan’s economy, accounting for roughly 10% of national output. The Gulf region — particularly Saudi Arabia and the United Arab Emirates — continues to serve as the primary labour market for Pakistani workers.
The report urged policymakers to diversify overseas employment destinations and expand labour export opportunities in other regions to reduce reliance on Gulf economies and safeguard remittance inflows.
