Business Recorder
From the latest numbers released by the central bank, remittances recorded a month-on-month decline in April 2026. Inflows rose 11.4 percent year-on-year but fell 7.6 percent month-on-month to $3.54 billion. This space has been warning about a potential decline in remittances if oil prices remain elevated and the conflict in the Middle East continues. Despite the ceasefire, the situation between Iran, the US and the wider Middle East remains volatile. This has raised concerns that the expected pressure from higher oil prices, a rising import bill and possible softening in GCC economies may be starting to show. Part of this concern may be valid. Oil prices have remained high, and unofficial reports continue to circulate about job pressures and some deportations or returns from GCC countries, which account for almost half of Pakistan’s total remittance inflows. However, the month-on-month slowdown in April 2026 is also likely to be seasonal. March remittances stood at $3.83 billion, supported by Ramzan and Eid-related transfers. April’s $3.54 billion looks lower mainly because it came after that seasonal peak. Overseas Pakistanis typically send more money before Eid for household spending, Zakat, gifts, and family support. Once Eid-related transfers pass, inflows usually normalize. Saudi Arabia remained the largest source of remittances, but inflows fell from around $919 million in March to about $842 million in April, a month-on-month decline of 8.4 percent. Since Saudi Arabia is Pakistan’s biggest remittance corridor, even a normal monthly dip has a significant impact on the headline number. UAE remittances also dropped, from roughly $824–830 million in March to about $735 million in April, a decline of around 11 percent month-on-month. This was one of the biggest corridor-level reasons for the overall monthly decline, and it also feeds into concerns about job losses and deportations from the UAE. Overall, remittances reached $33.9 billion in 10MFY26, up 8.5 percent year-on-year, continuing to provide a key cushion to Pakistan’s external account despite April’s month-on-month slowdown. Pakistan continues to carry a high concentration risk, as Saudi Arabia and the UAE dominate inflows. Remittances are holding up strongly, but the cushion is concentrated and therefore vulnerable. It would be too early to call the April month-on-month decline a structural collapse. The coming months will show where remittances are headed, and whether there is any change in the structure of flows. Monthly inflows may remain elevated as May inflows can show a moderate uptick due to the upcoming Eid ul Azha as families send money back home for sacrificial animals. However, the corridor mix remains the key risk. A slowdown in the GCC world could do the opposite. Pakistan’s external account is highly dependent on GCC labour-market conditions. For now, remittances remain the country’s strongest external buffer, but it is a concentrated buffer — and therefore not risk-free.
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