New Delhi, Jan 14 (NationPress) The remittances sent by Pakistanis living abroad have achieved an unprecedented level of $38.3 billion in FY25, reflecting a remarkable increase of over 26 percent compared to the previous year, according to statistics from the State Bank of Pakistan.

This significant surge has provided essential support to Pakistan’s foreign exchange reserves and has enhanced household consumption during a period when the economy grapples with numerous obstacles.

Interestingly, the funds flowing from overseas Pakistanis have now surpassed the country’s merchandise exports, which saw only a modest rise to approximately $32.3 billion in FY25, as reported by Daily Times.

Economists interpret this trend as indicative of a profound structural imbalance within Pakistan’s economic framework, where remittances are increasingly overshadowing revenues from trade and industry.

Experts highlight that the majority of remittances are allocated for everyday expenses rather than long-term investments.

While this influx supports families and sustains economic activity in the short term, it fails to bolster industries, enhance exports, or elevate productivity.

Over the long haul, an excessive reliance on remittances could lead to an overvalued real exchange rate, making local goods less competitive and exacerbating the trade deficit.

The growing dependence on foreign income also has social repercussions. Extended periods of employment abroad often strain family dynamics, particularly for children and spouses who remain in the home country.

In regions where remittances are a primary income source, younger generations may opt for migration instead of skill development, entrepreneurship, or local opportunities, undermining domestic economic progress.

The uneven distribution of remittance flows across different areas can further heighten social and economic disparities.

Political ramifications are also evident. Families reliant on remittances often gain better access to private healthcare, education, and other essential services, which diminishes public pressure on the government to enhance service delivery.

Analysts caution that this trend may foster policy complacency and hinder vital institutional reforms.

While economists acknowledge the immense value of remittances, reflecting the hard work and sacrifices of countless Pakistanis abroad, they urge that these inflows should not be viewed as a long-term substitute for necessary economic reforms.

For sustainable growth, Pakistan must leverage remittances more effectively by promoting investment, revitalizing exports, and reinforcing domestic industries.