KARACHI: Pakistan’s central bank expects workers’ remittances to climb to a record $44 billion in Fiscal Year 2026-27 that began this month, State Bank of Pakistan (SBP) Governor Jameel Ahmad said on Friday, alongside a forecast that the bank’s foreign exchange reserves will exceed $20.2 billion by the end of December 2026.
Remittances from overseas Pakistani workers are the country’s largest source of foreign exchange and a critical support for its external account. Inflows reached $38.1 billion in the first 11 months of the outgoing fiscal year, up 9.2 percent year-on-year, with May’s $4.25 billion the highest monthly inflow ever recorded.
Saudi Arabia and the United Arab Emirates were the two largest sources, together accounting for around $2 billion of the record $4.25 billion received in May alone. Remittances are expected to exceed $41.5 billion in Fiscal Year 2025-26 ending in June after the final numbers land.
“We are expecting next year’s remittances to be at $44 billion, for fiscal year 2027,” Ahmad told Arab News on the sidelines of a presser in Karachi.
The projection would extend a run in which monthly inflows have repeatedly hit all-time highs. The central bank has credited reforms relating to exchange companies and the promotion of formal remittance channels for the sustained rise.
On the reserves outlook, Ahmad said: “By the end of December 2026, our foreign exchange reserves will be more than $20.2 billion.”
The forecast marks a step up from the central bank’s earlier target of $17.5 billion by June 2026, which Ahmad announced at the IMF-World Bank meetings in Washington last October. The SBP has said it purchased $20 billion from the interbank market over the past three years to rebuild reserves and strengthen the economy’s capacity to absorb external shocks.
Reserves fell by $1.3 billion in one week in June on external debt repayments before recovering on multilateral inflows, SBP data showed.
Pakistan’s total bilateral debt is $14.5 billion, secured from China, Saudi Arabia and other bilateral lenders. The rising trade deficit is a “big concern” for the government and it is trying to boost exports to contain it, according to the SBP governor.
“This economic growth (3.7pc) is perhaps lower than our expectations” he said, adding the number could rise when final estimates of end-June land.
He said June inflation stood at 11.1 percent but average Consumer Price Index (CPI) for FY26 would still remain in the target range of 5-7 percent.
“Due to the Middle East situation our inflation outlook deteriorated,” the SBP chief said. “In coming months inflation will see improvement.”
The current account remained in surplus during 11 months of the outgoing fiscal year, with the SBP projecting the full-year balance to remain within 0-1 percent of GDP, placing it at the lower end of the central bank’s target range.
“Overall the situation of our external account has improved due to this balanced current account position (in FY26),” Ahmad added.
