Faheem Saigol calls for incentives to sustain momentum and reduce reliance on few markets
ISLAMABAD, AUG 10 /DNA/ – Pakistan Industrial and Traders Associations Front (PIAF) Chairman Faheemur Rehman Saigol has said that the record $3.21 billion remittances received in July 2025 are a timely boost for the country’s fragile external account, but sustaining this momentum will require consistent policies, stronger incentives for overseas workers, and measures to expand formal transfer channels. He said that while the latest State Bank of Pakistan data signals a robust start to the fiscal year, relying on a few key corridors remains a risk that must be addressed through diversification and long-term planning.
In a joint statement along with Senior Vice Chairman Nasrullah Mughal and vice chairman Tahir Manzoor Chaudhary, Faheemur Rehman Saigol noted that July’s inflows rose 7.4 percent year-on-year from $2.99 billion in July 2024 and marked a substantial 47.6 percent jump compared to July 2023. “These inflows are not just numbers on paper; they are the lifeline keeping Pakistan’s external account afloat at a time when foreign direct investment is low, export growth is modest, and debt repayments are mounting,” he said.
He observed that the bulk of the increase came from traditional strongholds, with Saudi Arabia leading at $823.7 million, up 8.4 percent from a year earlier, followed by the UAE at $665.2 million, showing an 8.8 percent gain. Within the UAE, Abu Dhabi saw a remarkable 37 percent surge, although Dubai’s remittances dipped slightly by 3.1 percent. The UK contributed $450.4 million with a modest 1.6 percent rise, while the European Union sent $424.4 million, up 21 percent, with strong performances from Italy, Spain, and Ireland.
However, the PIAF chief warned that the picture is not uniformly positive. “The United States, our fourth-largest remittance source, saw a 10.2 percent decline to $269.6 million, and there were double-digit drops from Malaysia, Kuwait, and several East Asian countries. These declines highlight the vulnerabilities we face if conditions in one or two key markets change,” he said. He stressed that this dependence on a handful of countries is a structural weakness, noting that Saudi Arabia, the UAE, the UK, and the US together account for over two-thirds of Pakistan’s remittances.
Faheemur Rehman Saigol said that Pakistan must not become complacent on the strength of seasonal or one-off gains. “Remittance inflows often spike around Eid and other occasions, or when exchange rates are stable and competitive. We need to build mechanisms that keep inflows steady year-round, such as better banking facilitation, reduced transfer fees, and digital remittance solutions that are accessible to low-income workers abroad,” he suggested.
He also credited the government’s crackdown on illegal currency trading and hawala/hundi networks for channelling more remittances through official banking channels. “Currency smuggling has been curbed to a large extent, and that’s visible in the numbers. But this effort must be sustained, because the moment enforcement weakens, informal channels will start pulling flows away again,” he cautioned.
The PIAF chairman pointed out that remittances are a major source of non-debt-creating foreign exchange inflows, helping Pakistan manage its current account deficit, which stood at just $162 million in July FY26. He said that if the current pace continues, the country could afford to increase imports of essential industrial inputs, which would support manufacturing and overall growth. “We cannot ignore the role remittances play in keeping our import cover and foreign reserves from collapsing,” he said, adding that reserves remain modest and will not be sufficient to meet all external financing needs without continued inflows and debt rollovers.
Faheemur Rehman Saigol stressed that Gulf markets, which have contributed more than 60 percent of total inflows in recent months, must be further cultivated through bilateral labour agreements, enhanced worker training, and strong diplomatic engagement to secure more jobs for Pakistani workers. “The UAE’s 84 percent surge in the first two months of the fiscal year is proof that targeted market engagement works. We need to replicate this success in other destinations,” he said.
