Pakistan’s remittance inflows reached a historic high of $38.3 billion in fiscal year 2025, showing a strong 27% year-on-year growth compared to $30.3 billion in FY24. This remarkable surge places Pakistan as the fifth-largest remittance recipient globally and the second-highest in South Asia, with major contributions coming from Saudi Arabia, the UAE, the UK, and EU countries.

While this inflow provides much-needed support to the economy, the cost of channeling remittances through the Pakistan Remittance Initiative (PRI) has risen sharply. In FY25, expenses under the initiative jumped by 70% to Rs 124.14 billion, compared to Rs 72.95 billion in FY24.

According to the State Bank of Pakistan (SBP), the rise in cost is linked to:

• Higher incentives under the Transfer to Cash Incentive Scheme (TTCIS) to counter the slowdown seen in FY23.
• Restoration of the Saudi corridor, which accounts for about one-fourth of inflows.
• Significant depreciation (around 60%) of the rupee against the Saudi riyal, the benchmark for rebates under TTCIS.
• Unprecedented growth in remittances after policy adjustments.

To manage the growing fiscal burden, the Economic Coordination Committee (ECC) has recently revised the incentive structure under TTCIS, setting a flat reward of 20 riyals per transaction and raising the minimum eligible transaction size from $100 to $200.

Over the past decade, remittances have grown by 92%, now surpassing export proceeds as the largest source of foreign exchange for the country. Since the launch of PRI in 2009, inflows have risen nearly fivefold from $7.8 billion to the current $38.3 billion.

The network supporting PRI has also expanded significantly. In 2009, only 25 financial institutions were part of the system; today, more than 50 — including banks, Islamic banks, microfinance banks, and exchange companies — facilitate remittance transfers. The number of international partners has grown from 45 to around 400, with 33 new global players joining in FY24 alone.

Remittances continue to play a vital role in Pakistan’s economic stability, serving as the strongest source of foreign reserves and providing relief for millions of households across the country.