LAHORE: The Pakistan Industrial and Traders Associations Front (PIAF) has expressed concern that a prolonged conflict in the Middle East could pose risks to Pakistan’s projected remittance inflows for the current fiscal year, warning that any disruption in expatriate employment in Gulf countries would directly affect the country’s external financial stability.
PIAF Chairman Faheemur Rehman Saigol said that Pakistan relies heavily on overseas remittances, particularly from Gulf economies, and any escalation of tensions in the Middle East could gradually weaken the flow of foreign exchange sent by expatriate workers. He said that while the impact may not be immediate, prolonged uncertainty in the region could affect employment prospects for thousands of Pakistanis working abroad.
He noted that the government has projected remittance inflows of around 42 billion dollars during the current fiscal year 2025-26, which remain a crucial support for the country’s balance of payments and foreign exchange reserves.
However, if the conflict continues and regional economies begin to slow down, many small and medium-sized companies in Gulf countries may struggle to sustain expatriate employment, which could ultimately reduce remittance inflows to Pakistan.
Faheemur Rehman Saigol said that Pakistan receives a significant portion of its remittances from countries such as Saudi Arabia and the United Arab Emirates, where millions of Pakistani workers are employed in construction, services, transport, retail and hospitality sectors.
Any slowdown in these economies due to geopolitical tensions, rising costs or declining tourism could affect job security for expatriate workers.
He added that many overseas Pakistanis have reported that their employment and salaries remain stable for now, but they have expressed concerns that if the conflict continues for a longer period, companies may begin cutting costs, which could lead to layoffs or reduced working hours for foreign workers.
According to recent figures released by the State Bank of Pakistan, workers’ remittances recorded an inflow of 3.3 billion dollars in February 2026, reflecting a 5.2 percent increase compared to the same month last year.
Overall remittances during the first eight months of the current fiscal year, from July to February, reached 26.5 billion dollars, showing a growth of 10.5 percent compared with 24 billion dollars received during the same period last year.
PIAF Senior Vice Chairman Nasrullah Mughal said that although remittances have remained strong so far, Pakistan cannot ignore the potential medium-term risks arising from instability in the Middle East. He said the Gulf region hosts millions of Pakistani workers and any economic slowdown there would inevitably have consequences for Pakistan’s economy.
Nasrullah Mughal pointed out that tourism and service industries in several Middle Eastern countries have already started feeling the effects of regional tensions. Many expatriates working in hotels, travel companies and related services are facing uncertainty as tourism activity slows down. If the situation persists, these sectors may reduce their workforce, which could directly affect remittance inflows.
PIAF Vice Chairman Tahir Manzoor Chaudhry said that remittances have historically played a vital role in stabilizing Pakistan’s economy during periods of financial stress. They support household consumption, strengthen foreign exchange reserves and help offset trade deficits.
Tahir Manzoor Chaudhry added that policymakers should closely monitor developments in the Middle East and prepare contingency plans in case regional instability begins to affect employment opportunities for Pakistani workers. He said the government should also expand labour export agreements with other regions to diversify overseas employment markets.
Faheemur Rehman Saigol said that despite the emerging risks, Pakistan still has an opportunity to maintain stable remittance inflows if the government adopts proactive economic and diplomatic strategies.
He urged policymakers to remain vigilant and ensure that overseas Pakistanis continue to receive the support and facilitation needed to sustain their employment abroad.
