Remittances from overseas Pakistanis exceeded export earnings during the first half of fiscal year 2024-25, highlighting a shift in foreign exchange inflows despite the government’s efforts to boost exports.
According to data issued by the State Bank of Pakistan, remittances amounted to $17.645 billion, exceeding exports of $16.561 billion, a difference of $1.084 billion. In monthly data, remittances consistently exceeded exports.
Exports in July amounted to $2.307 billion, compared to $2.994 billion in transfers. Likewise, August recorded exports worth $2.762 billion and remittances worth $2.942 billion. This trend continued as remittances exceeded 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 rise in remittances to multiple factors, including a crackdown on informal remittance channels such as hawala and hundi under the FATF, improved monitoring by the State Bank of Pakistan, and narrowing exchange rate gaps between open market and interbank interest rates.
On the export side, industry experts have criticized the tax policies, calling them unfairly harmful to local value chains. They highlighted inconsistencies in the Export Finance Scheme (EFS) and tax exemption for imports not manufactured locally.
The National Export Development Board (NEDB), headed by Prime Minister Shehbaz Sharif, has directed the Commerce Ministry to address exporters’ concerns, including increasing the EFS limit beyond Rs 230 billion.
However, the Finance Department has resisted these measures, citing the State Bank of Pakistan’s transition plan under the IMF to phase out the financial bailout regime and transfer it to Exim Bank.