War in Middle East fails to dent remittances in March

Pakistan's remittances defied the ongoing Middle East conflict, with inflows increasing by 17 percent to $3.8 billion in March, marking the highest monthly figure this fiscal year, as announced by the State Bank of Pakistan. This surge, partly attributed to Ramazan and an increase in UAE visa applications, showed positive growth from most Middle Eastern countries, though the March figure was 5 percent lower than the previous year. Overall remittances for July-March FY26 reached $30.321 billion, an 8.2 percent increase, highlighting their critical role in Pakistan's economy for managing trade deficits, servicing debt, and bolstering foreign exchange reserves. However, Pakistan anticipates substantial upcoming outflows totaling $4.9 billion for Eurobonds and the UAE, which will significantly reduce the SBP's current reserves of approximately $16.5 billion. Financial experts note difficulties in international borrowing and suggest that a regional ceasefire could improve Pakistan's economic situation, with Saudi Arabia, UAE, and the UK remaining key remittance sources, while US inflows have declined.