KarachiGulf remittances rose through 73 days of conflict.
Pakistan’s Middle East inflows reached $18.2 billion — 53% of $33.9 billion total — as most workers stayed abroad rather than returning home, State Bank of Pakistan data show.
The State Bank targets $18 billion in reserves by end of June after a $1.2 billion IMF tranche.
Sources: Dawn
THE BACKBONE
Remittances are now Pakistan's single largest source of foreign exchange — exceeding exports and dwarfing FDI. Unlike loans or IMF tranches, they carry no conditionality, no repayment, and no interest. The diaspora is effectively Pakistan's external creditor.
WHERE THE WORKERS ARE
Roughly 96% of Pakistan's overseas labor force is in the Gulf, with Saudi Arabia and the UAE alone absorbing more than half. These are construction crews, drivers, domestic workers, nurses — categories that GCC economies structurally cannot fill from their own populations.
WHY WORKERS STAY THROUGH WARS
Gulf labor is kafala-sponsored: a worker's visa is tied to a single employer, and leaving early often forfeits end-of-service gratuity that can equal a year of wages. Combined with the cost of a return ticket and the absence of jobs back home, the rational choice during a regional war is almost always to stay put.
THE FX DEATH SPIRAL THIS PREVENTS
Import-dependent countries hit a death spiral when energy prices spike: reserves drain, the currency falls, the next shipment costs more in local terms. Sri Lanka hit this in 2022; Pakistan brushed it in 2023. A steady remittance flow during a Gulf war is what keeps the spiral from starting.
THE COSMETIC RESERVES
Pakistan's headline reserves figure mixes real export earnings with short-term Gulf deposits — Saudi and UAE dollars parked at the State Bank of Pakistan that count as reserves but are 12-month liabilities. Remittances are the only line item that is genuinely Pakistan's to spend.
THE BAILOUT CYCLE
This is Pakistan's 24th IMF program since 1958 — more than any other country. The pattern is identical each time: balance-of-payments crisis, IMF stabilization, subsidy cuts, brief recovery, fresh crisis. The $1.2bn tranche buys roughly two months of imports.