RDA 2.0 — beyond dollar inflows

Over time, workers’ remittances have evolved into the single most critical stabilising force for Pakistan’s external sector, effectively anchoring both the current account and broader balance of payments. With inflows reaching over $38 billion in FY25, they now consistently offset the country’s persistent trade deficit, covering more than 100 per cent of the gap in recent years. This represents the primary buffer against Pakistan’s chronic import dependence and limited export base. In effect, remittances function as a quasi-export stream, directly financing the trade imbalance. Without these inflows, the current account would face persistent and significantly wider deficits, bringing pressure on the exchange rate and foreign exchange reserves. The data underscores that Pakistan’s external account is reliant on remittances for stability. In FY25, exports stood at roughly $40.7bn against imports of over $70bn, creating a trade deficit of about $29bn, which was entirely bridged by remittance inflows. Actually, this translates into remittances financing around 130pc of the trade gap, a ratio that has remained above 100pc in the last five years. Such dependence highlights both their importance and the inherent vulnerability: any disruption in remittance flows due to geopolitical shocks, oil price cycles or labour market conditions in host countries can quickly transmit into external sector stress. As a result, sustaining and formalising these inflows is essential for maintaining current account sustainability, exchange rate stability and overall macroeconomic equilibrium. Expanding the scope of Roshan Digital Accounts could channel remittances into productive investments rather than consumption Despite steady growth in formal remittances, a substantial proportion — estimated between 20pc and 50pc of formal inflows — continues to move through informal channels such as hawala and hundi. These informal channels persist due to their cost advantage, speed, accessibility and d