Rising tensions in the Middle East threaten to impact the Pakistani economy and the livelihoods of millions of overseas Pakistanis.
A new report by the Pakistan Institute of Development Economics (PIDE) warns that remittances may fall by $3–4 billion annually, affecting the nation’s economic stability.
Around 6 million Pakistanis are currently working in Middle Eastern countries, with 700,000 to 800,000 going abroad for employment each year.
If the ongoing conflict continues, 500,000 Pakistanis may not be able to travel abroad by 2026, while another 500,000 workers could return early from Gulf countries.
These returning workers are expected to increase pressure on Pakistan’s already strained job market, raising concerns over domestic unemployment.
Remittances currently account for about 10 percent of Pakistan’s economy, making the country heavily reliant on income from Gulf countries such as Saudi Arabia and the UAE.
PIDE highlights that over-reliance on these markets poses a significant risk to Pakistan’s economic recovery, especially amid rising geopolitical tensions.
Proposed measures by PIDE
To mitigate the impact, PIDE recommends the government implement programs to:
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Provide employment and business opportunities for returning workers.
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Expand overseas employment to new countries beyond the Gulf region.
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Strengthen economic measures to protect remittance flows and ensure stability.
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