Remittances Stabilize Pakistan’s Economy, Erasing $28 Billion Trade Deficit

Karachi: Remittances from overseas Pakistanis have emerged as a critical stabilizing force for the national economy, effectively eliminating a $28 billion trade deficit, according to Mian Zahid Hussain, a prominent business leader. As global uncertainty persists, Hussain has urged the government to safeguard these vital inflows amid potential threats.

Mian Zahid Hussain, who holds several significant positions including Chairman of the National Business Group Pakistan and President of the Pakistan Businessmen and Intellectuals Forum, highlighted the pivotal role of remittances in the country’s economic landscape. He pointed out that Pakistan received $3.7 billion in remittances in May 2025, marking a 16 percent increase from the previous month and a 14 percent rise compared to May the previous year.

These figures represent the second-highest monthly inflow in Pakistan’s history, surpassed only by March 2025’s $4.1 billion. From July 2024 to May 2025, the total remittances amounted to $34.9 billion, a substantial 29 percent increase from the previous fiscal year’s $27.1 billion. In response to this growth, the State Bank of Pakistan has revised its full-year remittance projection to $38 billion.

The latest Economic Survey acknowledges the transformative impact of remittances, which have improved external accounts and turned the current account into a $1.9 billion surplus during the July to April period, a sharp reversal from the previous year’s $1.3 billion deficit.

Despite these positive developments, Hussain warned of potential threats to remittance flows, citing shifting immigration policies in host countries and geopolitical tensions, notably the Israel-Iran conflict. To mitigate these risks, he stressed the importance of promoting domestic industrialization and expanding exports to ensure long-term economic resilience.

Hussain called for enhanced diplomatic and legal support for overseas Pakistanis, alongside strengthening the formal banking system, to preserve the remittance ecosystem’s stability. These measures, he argued, are essential for maintaining macroeconomic stability and supporting national income growth.