Over the past five decades, Pakistan’s workers’ remittances (WRs) have surged from US$0.14 billion in 1970 to US$30 billion in FY24, with expectations to reach US$35 billion in FY25. During this period, total WRs exceeding US$500 billion have been remitted into the economy.

The share of WRs in GDP has increased from 2 percent in the 1970s to 10 percent in FY24. These remittances have strengthened the country’s foreign exchange reserves, contributing 30 percent to 60 percent of the total reserves, covering the trade deficit by 25 percent to 60 percent, and supporting debt servicing by 10 percent to 60 percent.

Additionally, WRs filled the current account deficit (CAD) by about 5 percent to 10 percent during the 1970s and 1980s, a share that expanded to 40 percent to 60 percent of the CAD during the 2020s.

During the 1970s and 1980s, approximately 50 percent to 60 percent of WRs were utilized for household consumption, while 20 percent to 25 percent were invested in real estate and the housing sector.

Over time, the share allocated to household consumption declined to 30 percent to 40 percent during the 2010s and 2020s, as more WRs were directed toward real estate (30 percent to 35 percent) and SMEs (15 percent to 20 percent).

Investments in education and healthcare also grew, reaching 10% to 15 percent and 8 percent to 12 percent, respectively, in the 2020s. Meanwhile, the share of WRs in agriculture declined from 10 percent to 15 percent in the 1970s to 5 percent to 8 percent in the 2020s.

WRs have also played a crucial role in poverty alleviation, contributing to a 15 percent to 40 percent reduction in poverty levels among recipient households. Punjab and KPK recorded 15 percent to 20 percent higher per........

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