By Mahira Sarfraz
Published in Dawn on April 14, 2025
State Bank Governor Jameel Ahmad on Monday said that remittances were at a record $4.1 billion during the month of March.
Remittances from overseas Pakistani workers had soared by nearly 40 per cent year-on-year in February 2025, reaching $3.12bn.
Compared to January 2025, remittance inflows increased by 3.8pc, providing the much-needed financial support to the economy, government reserves and liquidity for importers.
For the first nine months of FY25 (July-March), total remittances have reached $28.07bn, marking a substantial 33pc rise compared to the same period a year ago.
Speaking at the Pakistan Stock Exchange (PSX) today, the SBP chief highlighted that foreign reserves were now projected to exceed $14bn by June.
He also added that foreign debt repayment obligations stood at $26bn for FY25 — from which $16bn was expected to be rolled over or refinanced, reducing actual repayment pressure to around $10bn.
On a positive note, he noted that economic activity had “shown signs of revival”, adding that if agricultural had matched last year’s performance, the country’s GDP growth would have been more than 4.2pc.
However, due to a weaker-than-expected agricultural season, Ahmad said GDP growth was now projected to be around three pc.
“Every indictor is indicating that the economic activity has substantially picked up,” he said, adding that it was “not fully reflected in the growth numbers” because of agriculture.
According to AKD Securities, inflows during March were mainly sourced from Saudi Arabia ($987m), UAE ($842m), UK ($684m), and US ($419m).
In January, the SBP governor had said that the country was meeting its economic targets, with its debt level and balance of payments still under control.
In 2023, Pakistan experienced one of its worst economic crises in decades and all-time high inflation, with its foreign exchange reserves dwindling to $4.6bn — barely enough to cover three weeks’ worth of imports.
This prompted the government to seek an International Monetary Fund (IMF) bailout to support its balance of payments (BoP) crisis.
The IMF, which approved a $7bn rescue package for Pakistan, expects the country’s growth rate to gradually improve to 4.5 per cent by 2029.
On inflation, he said inflationary pressure was also on a good trajectory, noting that last month CPI inflation had reached a historic 0.7pc.
“I can share from the State Bank’s side that this was exactly what we had projected and what we presented to our Monetary Policy Committee on 10th of March,” he said.
The CPI inflation had surged above 10pc in November 2021 and remained in double digits for 33 consecutive months until July. In between, it peaked at 38pc in May 2023, driven by unprecedented food and energy prices.
In March, headline inflation dropped to 0.7pc year-on-year in March 2025, marking the lowest reading since December 1965.
The decline surpassed both market expectations and the Ministry of Finance’s projection, which had anticipated inflation between 1pc and 1.5pc for March.
The slowdown in the inflation rate is primarily driven by lower prices of wheat and its by-products, perishable items like onions, potatoes, and certain pulses and a reduction in electricity charges.
