Editorial
Remittances are often praised as one of Pakistan’s strongest economic cushions. They are seen as stable, reliable, and free of political cost, helping the country manage foreign exchange shortages, support the rupee, and avoid deeper balance-of-payments crises. At the national level, these inflows appear to be an unquestionable blessing. Yet recent household data suggests a more troubling reality beneath the surface.
According to the Household Integrated Economic Survey 2024–25, the share of foreign remittances in household income has risen sharply over recent years. At the same time, gifts, assistance, and domestic remittances have also increased. This rise, however, is happening alongside worrying trends: fewer earners per household and declining consumption of basic food items such as wheat, pulses, milk, and cooking oil. Together, these signals suggest that households are not using remittances to get ahead, but to cope.
In a growing economy, rising remittances usually complement rising incomes and expanding job opportunities, enabling families to invest in education, businesses, or better housing. In Pakistan’s case, the opposite seems to be happening. Remittances are filling income gaps created by weak job creation, stagnant wages, and falling purchasing power. Families are relying on support from abroad simply to maintain basic living standards.
At the macro level, remittances remain Pakistan’s most dependable external inflow, exceeding foreign investment and often offsetting trade weaknesses. But this stability can mask deep micro-level fragility. Remittances are increasingly used for consumption smoothing rather than productive investment, creating a quiet dependency where households survive but the domestic economy fails to expand.
This creates a clear paradox. Remittances stabilise the economy, yet they also reveal economic stress at home. The real issue is not remittances themselves, but an economy that is not generating enough jobs, income, and opportunity. Until domestic productivity improves, remittances will remain less a symbol of progress and more a lifeline for survival.
