ISLAMABAD, APR 12: /DNA/ – The All Pakistan Business Forum (APBF) has expressed concern over emerging risks to Pakistan’s remittance inflows, cautioning that geopolitical tensions in the Middle East could impact one of the country’s most vital sources of foreign exchange.
APBF President Seyd Maaz Mahmood said that while remittances remain relatively strong overall, recent data indicating a year-on-year decline in monthly inflows signals the need for careful monitoring and proactive policy measures.
“Remittances are a backbone of Pakistan’s economy, supporting foreign exchange reserves, stabilising the rupee, and sustaining millions of households,” he said. “Even a modest decline highlights underlying vulnerabilities that must not be ignored.”
He noted that seasonal factors, particularly increased transfers ahead of Eidul Fitr, had temporarily boosted inflows on a month-on-month basis. However, he cautioned that the true trend would become clearer in the coming months as seasonal effects fade.
APBF Chairman Ibrahim Qureshi emphasized that Pakistan’s heavy reliance on remittances from Gulf countries, especially Saudi Arabia and the United Arab Emirates, makes the economy highly sensitive to developments in the region.
“Any prolonged instability in the Middle East could directly affect employment opportunities and income levels of overseas Pakistanis,” he said. “This, in turn, would impact the flow of remittances back home.”
He stressed that April and May inflows would be particularly critical in assessing the direction of remittance trends, especially in the context of evolving geopolitical conditions.
Business leaders pointed out that remittances have played a crucial role in offsetting Pakistan’s widening trade deficit and supporting the current account balance. With imports rising and exports facing challenges, the country has become increasingly dependent on overseas inflows to maintain economic stability.
They warned that any sustained disruption in remittance flows could put additional pressure on foreign exchange reserves and the exchange rate, further complicating the economic outlook.
Syd Maaz Mahmood highlighted that over the past few years, increased labour migration and government incentives to encourage the use of formal banking channels have helped sustain remittance growth. However, he stressed that these gains could be undermined by external shocks.
“The government must continue to facilitate overseas Pakistanis by ensuring smooth and cost-effective remittance channels,” he said. “At the same time, efforts should be made to diversify the destinations of Pakistani workers to reduce overdependence on a few regions.”
Ibrahim Qureshi added that strengthening economic ties with emerging markets and expanding manpower exports to Europe and other regions could help mitigate risks associated with regional instability.
“Diversification is key,” he said. “We need to explore new labour markets and create opportunities that ensure consistent inflows regardless of geopolitical developments.”
APBF president stressed that while the overall outlook for remittances remains positive, the emerging risks linked to global and regional developments require timely policy intervention.
