Middle East tensions may cut Pakistan remittances by $3–4 billion, PIDE warns

Rising tensions in the Middle East could reduce Pakistan’s remittance inflows by $3–4 billion and disrupt overseas employment, according to a report by the Pakistan Institute of Development Economics (PIDE). The report warned that nearly six million Pakistanis working in the region face uncertainty, with potential implications for both remittance flows and labour exports.

Each year, around 700,000 to 800,000 Pakistanis travel to Gulf countries for employment, but the report estimates that about 500,000 workers may be unable to secure overseas jobs in 2026 if the conflict persists.

It also highlighted the possibility that another 500,000 Pakistani workers could return from the region, increasing pressure on the domestic labour market.

PIDE noted that Pakistan’s heavy reliance on Gulf economies exposes it to external shocks, particularly during periods of geopolitical instability.

Remittances contribute nearly 10% to Pakistan’s economy, with Saudi Arabia and the United Arab Emirates serving as the primary destinations for Pakistani workers.

The report recommended that Pakistan diversify its labour export markets by expanding employment opportunities in new countries to reduce dependence on the Gulf region.