War in Middle East fails to dent remittances in March

KARACHI: Despite turbulence stemming from the ongoing Middle East conflict, the country received 17 per cent higher remittances in March compared to February, the State Bank of Pakistan announced on Wednesday.

The $3.8bn inflow was the highest so far this fiscal year, but it was 5pc lower compared to $4bn in March FY25.

The war did not impact remittances from the Middle East, as inflows from almost all countries experienced positive growth.

Currency experts said that the higher inflow in March was also due to Ramazan, but the war in the Gulf was more significant than anything else. Pakistanis working in the Gulf countries did not return home; instead, hundreds of Pakistanis have been applying for UAE visas.

Pakistan gets fiscal year’s highest inflow of $3.8bn

The SBP data showed that the country received a total of $30.321bn during July-March FY26, indicating an increase of 8.2pc or $2.29bn. The country received $28bn in 9MFY25.

Remittances are the backbone of the country, as it largely relies on inflows to cover the trade deficit, service debt, and build foreign exchange reserves.

The State Bank stated on Wednesday that it has paid $1.4bn towards the maturity of Eurobonds, while a further outflow of $3.5bn to the UAE is scheduled for this month. This substantial outflow of $4.9bn will undoubtedly reduce the SBP reserves, which were approximately $16.5bn on March 27.

Financial experts stated that Pakistan is currently unable to issue international bonds and that borrowing from commercial banks remains challenging due to heightened risks.

They noted that if the ceasefire succeeds in halting the conflict in the region, the situation could also improve for Pakistan, as it relies on imported oil and gas.

The data showed that the largest inflow was from Saudi Arabia, reaching $7.086bn in 9MFY26, a 3pc rise. For many years, Saudi Arabia has remained the largest provider of remittances to Pakistan, while also offering loans and oil on deferred payments.

The inflows from the UAE, the country which faced severe attack during the war, were $6.267bn in 9MFY26, showing a 10pc increase compared to the last fiscal year.

Inflows from the United Kingdom increased by 8.4pc to $4.6bn in 9MFY26. Other significant inflows were $3.9bn from EU countries, with the highest rise of 20pc; $2.891bn from GCC countries, up 5pc; while inflows from the US declined by 5.7pc to $2.661bn.

It is believed that the reconstruction phase across all Gulf countries would offer opportunities for Pakistanis to benefit, provided the war ends permanently.

Published in Dawn, April 9th, 2026