Pakistan’s overseas workers’ remittances surpassed export earnings during the first half of fiscal year 2024-25, highlighting a shift in foreign exchange inflows despite government efforts to boost exports.
According to the data released by the State Bank of Pakistan (SBP), remittances reached $17.645 billion, exceeding exports at $16.561 billion, a difference of $1.084 billion. In monthly breakdowns, remittances consistently outpaced exports.
In July, exports stood at $2.307 billion compared to $2.994 billion in remittances. Similarly, August recorded exports of $2.762 billion and remittances of $2.942 billion. The trend continued with remittances surpassing exports by $0.015 billion in September, $0.070 billion in October, $0.082 billion in November, and $0.238 billion in December.
Economists attribute the remittance surge to multiple factors, including the crackdown on informal remittance channels like Hawala and Hundi under the FATF framework, improved monitoring by the SBP, and narrowing exchange rate gaps between the open market and interbank rates.
On the export side, industry experts criticised the tax policies, terming sthem unfairly disadvantageous to local value chains. They highlighted inconsistencies in the Export Financing Scheme (EFS) and the tax exemption for imports not manufactured locally.
The National Export Development Board (NEDB), chaired by Prime Minister Shehbaz Sharif, has directed the Commerce Ministry to address exporters’ concerns, including increasing the EFS limit beyond Rs230 billion.
However, the Finance Division has resisted these measures, citing the SBP’s transition plan under the IMF to phase out the EFS and transfer it to Exim Bank.
