Pakistan is receiving around $44 billion annually from overseas workers, making remittances one of the country’s most important sources of foreign exchange.

The inflows now account for approximately 10 percent of Pakistan’s gross domestic product (GDP) and cover nearly the entire external financing deficit, helping the country manage its foreign currency requirements.

Emre Akcakmak, a portfolio manager at East Capital, highlighted the trend in a recent post on X, describing overseas workers’ remittances as “Pakistan’s oil.”

He noted that an estimated 10 million Pakistanis living abroad are sending substantial amounts of money home, making these transfers critical to the country’s economic stability.

Remittances Strengthen Pakistan’s External Position

Pakistan faced a severe foreign exchange crisis in 2023, when its reserves were sufficient to cover only around 1.5 months of imports. The country also came close to defaulting on its international debt obligations amid mounting external financing pressures.

Since then, gross foreign exchange reserves have increased nearly fivefold, while inflation has fallen sharply from its peak of 38 percent. Inflation also briefly dropped to 0.2 percent before climbing to 9.6 percent in the latest reported reading.

Growing remittance inflows have helped strengthen the country’s external position by providing a steady supply of foreign currency.

Overseas Pakistanis Send $44 Billion Annually

Remittances have expanded considerably over the past 12 years, increasing from around $16 billion in September 2014 to more than $43 billion by September 2026.

The trend highlights the growing importance of overseas Pakistanis in supporting the country’s foreign exchange reserves and external payments.

Akcakmak also highlighted Pakistan’s stock market performance, noting that Pakistani equities generated a 318 percent return in US dollar terms over the period, equivalent to an annualized return of 53 percent.

He attributed the improvement in Pakistan’s broader economic position to a combination of political stability, the IMF programme and higher remittance inflows.

With annual transfers approaching $44 billion, overseas Pakistanis have become a major source of foreign exchange for the country. These inflows help finance imports, support the balance of payments and reduce pressure on Pakistan’s external accounts.