Jul–Apr FY25: Robust 31pc jump recorded in remittances
KARACHI: Inflows of home remittances recorded a robust 31 percent growth during the first 10 months of the current fiscal year (FY25) due to stable exchange rate.
According to the State Bank of Pakistan (SBP), the country received remittances amounted to $31.2 billion during July–April FY25, compared to $23.9 billion in the same period of the previous fiscal year (FY24), reflecting a significant increase of $7.3 billion.
With a 24 percent share, Saudi Arabia remained the largest contributor to Pakistan's home remittances during the first ten months of the current fiscal year. Inflows from the Kingdom surged 31 percent, reaching $7.6 billion mark.
The United Arab Emirates (UAE) ranked second, with remittances totaling $6.36 billion, reflecting a significant 51 percent increase. The United Kingdom followed with $4.77 billion, while inflows from the United States stood at $3.12 billion.
Since October 2024, Pakistan has been consistently receiving around $3 billion in monthly remittances. This upward trend continued in April 2025, with workers' remittances amounting to $3.2 billion, up from $2.8 billion in April 2024, marking a 13 percent year-on-year increase.
However, April inflows were lower than the record high of $4.2 billion received in March 2025, which was primarily driven by Eid-related remittances. During April, remittances inflows 2025 were mainly sourced from Saudi Arabia worth $725.4 million, United Arab Emirates $657.6 million, United Kingdom $535.3 million and United States of America $302.4 million.
Healthy home remittances inflows have eased pressure on external account and the current account recorded a sizable surplus of $1.2 billion in March, mainly due to record-high workers' remittances. This surplus and SBP's FX purchases partially cushioned the impact of large ongoing debt repayments on the SBP's FX reserve.
With higher than earlier projected growth in workers' remittances, lower commodity prices, and continuing momentum in exports, the current account balance for FY25 is projected in the range of -0.5 to 0.5 percent of GDP.
Copyright Business Recorder, 2025
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
4 hours ago
- Business Recorder
Pakistan leather industry seeks cut in import duties on chemicals
Pakistan's leather industry has proposed lowering of customs duties on the import of chemicals used in leather manufacturing, saying it will help make the sector regionally competitive and viable, it was learnt on Wednesday. Hamid Arshad Zahur, Central Chairman of the Pakistan Tanners Association (PTA), proposed to reduce customs duty from 20% to 16%, and Additional Customs Duties (ACD) from 4% to 2% across all chemical imports. The development comes as Muslims around the world are to celebrate Eid-ul-Adha this week. In Pakistan, the first day of Eid will fall on Saturday, June 7. According to Zahur, around 40% of Pakistan's total leather production is sourced through sacrifice of animals during Eid-ul-Adha. Sharing statistics, PTA central chairman said tanners received around 0.7 million animal hides, including 4.5 million goats, 2.5 million cows, 0.5 million sheep, and 25,000 camels last year. The total value of the collected hides was estimated at Rs10 billion, he said. Zahur further stated that around 25% of the hides, worth approximately Rs4 billion, were spoiled due to 'mishandling and the failure to preserve them with salt in a timely manner'. 'Tanners have been urging both the federal and provincial governments to establish proper abattoirs to prevent the wastage of hides,' he said. 'The country lost hides worth Rs4 billion due to improper handling, which constitutes 40% of total local production.' PTA central chairman emphasised that the government should establish centralised slaughterhouses for carrying out religious sacrifices similar to other Muslim countries such as Saudi Arabia, Malaysia, Türkiye, Indonesia, and others. In its budget proposals, PTA requested to keep the export sector under the original Fixed Tax Regime, but to increase the turnover tax from 1% to 1.5% to increase government revenue. Eid-ul-Adha 2025: trade peaks at Asia's largest cattle market in Karachi The leather sector is normally working at a 4-8% profit margin in general and hence a 1.5% turnover tax will actually be a net 25% tax on profit and in line with the Federal Board of Revenue's (FBR) revenue generation targets, according to the PTA. Zahur urged not to bring the export sector under the final tax regime. He opposed the proposal to apply sales tax at the import of raw materials under the Export Facilitation Scheme (EFS) in the next budget. 'This step by the FBR/Ministry of Finance will totally negate the basic principal of no duty, no drawback under which the EFS was originally developed,' he said. 'One wrong has been done last year by imposing sales tax on domestic sales under EFS and it will be a second wrong to impose sales tax on import of raw material under the EFS, going forward. 'This will lead to a cash flow crunch, defeat the very purpose of the EFS and be detrimental in increasing the exports any further,' PTA official said. He urged the government to bring the EFS back to its original form as on June 30, 2024, whereby purchase of domestic and imported raw materials under EFS was exempt from any duties or taxes. Meanwhile, PTA suggested to bring down the rate of sales tax down to 17% in the next budget from the current 18%. It also proposed minimum tax threshold for salaried individuals at Rs1.2million per annum.
Express Tribune
20 hours ago
- Express Tribune
South Punjab enjoys cattle market boom
For many, Eidul Azha is not just a religious occasion but a season of long-awaited income. Muhammad Hussain, a small farmer from Pipli Adda in Vehari, raises cattle all year round with devotion. "This is our crop," he says, gently brushing his prized bull. "I don't grow wheat only but I grow bulls also. Eid is our harvest season." He feeds the cattle hand-cut grass, sings to them and decorates them in anticipation of buyers who arrive from cities, seeking healthy, attractive animals for sacrifice. Hussain is not alone. Thousands like him across South Punjab invest months of labour, love and money into rearing animals, hoping for good returns on the Eid. The region known for its agricultural lifestyle transforms into a thriving economic market fueled by livestock trade during the season. Connecting the dots are people like Malik Nadeem, a middleman in Chak 34/WB who facilitates deals between farmers and urban customers. "I bring animals from remote villages to markets in Multan, Vehari and Lahore. It's not easy, but this is our season to earn after a year of struggle," he shares while supervising the loading of cattle onto rickshaws and mini-trucks under the summer sun. The economic activities do not stop with the sale of animals. A network of support emerges. Allah Dittah, a young grass seller from Chah Darkhanwala, says he sells bundles of fodder at twice the usual rate before the Eid. "People buy the best for their animals in these days." His stall outside the local market never shuts during the Eid week. Then there is Sufi Nazeer, who sells ornamental accessories for animals, including necklaces, bells, colourful ropes and embroidered sheets. "When a child loves his bull, he decorates it like a bride," he stated. His Eid sales sustain his family for months. The story continues even after the sacrifice. Allah Rakha collects animal hides door to door.
Business Recorder
20 hours ago
- Business Recorder
The great myth of ‘crowding out'
Each time the conversation turns to Pakistan's credit-to-GDP, a familiar chorus follows: the sovereign is crowding out the private sector. Government borrowing is now over 70 percent of the banking sector liquidity, and is said to be absorbing all available capital, leaving none for entrepreneurs or exporters. Like 'value addition' or 'fiscal space,' crowding out has become an overused and underexamined refrain - repeated so often it now functions as a placeholder for serious thinking. The problem is not that the theory is always wrong. The problem is that it has flattened the debate into a single, self-reinforcing belief: that if the state would simply borrow less, banks would resume lending to the private sector. That assumption has been tested. And it failed. Over the past two decades, the state has repeatedly tried 'setting liquidity aside' for the private sector. The instrument of choice was the refinance scheme: liquidity created by the central bank and supplied to banks at zero or heavily concessional rates. These schemes were ostensibly meant to channel credit to sectors that markets overlooked: SMEs, exporters, housing, renewables. It worked, at least on the surface. Liquidity flowed, spreads narrowed, and targets were met. But none of it changed the basic credit calculus. Because banks still bore hundred percent of the credit risk,they predictably lent to the same credit profiles they always had: large corporates, familiar clients, and borrowers with collateral. Refinance simply made already-bankable clients cheaper to finance. It did not expand access. It did not alter risk appetite. Is it possible that bank's aversion to widening the credit net had little to do with access to liquidity, and more to do with their risk assessment? What refinance did achieve, quietly was monetary expansion. SBP injections inflated the money supply, bypassed budget scrutiny, and masked the true fiscal cost of subsidized lending. These schemes functioned as off-book quasi-fiscal operations, sold as developmental finance. The result: cheap credit for a few, inflation for the rest. Under the conditions of the ongoing IMF program, the façadeis being dismantled. Refinance is being pushed out of SBP and into the finance ministry. Subsidies will now be explicitly budgetedfor, and likely routed through developmental finance institutions such as the EXIM Bank. On paper, this improves transparency. The fiscal cost is now visible and subject to budgetary discipline. The inflationary impulse, while still present, is at least attached to real expenditure trade-offs. But cleaner optics do not guarantee better outcomes. Nothing about the shift from SBP to MoF alters banks' core behavior. Whether liquidity is created at the central bank or subsidized through the budget, the lending decision still rests with the bank, as does the credit risk. And most Pakistani firms still fail that test—not because they lack viability, but because they lack collateral, audited accounts, or institutional familiarity. That is the real constraint. Not liquidity. Not crowding out. Risk. And the data reflects it. Pakistan's private sector credit-to-GDP ratio has remained stuck under 15 percent for more than a decade, even during years such as 2022 when share of refinance climbed up to 20 percent of total private sector lending. In contrast, peer economies in South Asia and the broader middle-income cohort have steadily expanded credit penetration, without relying on artificial liquidity windows. The difference is not funding availability. It is system design. So no, crowding out is not the one-size-fit-all explanation for Pakistan's credit stagnation. The real story is institutional: a refusal to underwrite unfamiliar risk, a regulatory framework that punishes diversification, and a policy discourse that keeps prescribing liquidity for a problem rooted in risk. Until that changes, liquidity will continue to rotate around the same borrowers, even as the rest of the economy remains locked out.
