Rising tensions in the Middle East could significantly impact Pakistan’s economy and overseas workforce, potentially reducing annual remittance inflows by $3–4 billion, according to a report by the Pakistan Institute of Development Economics.
The report cautioned that prolonged conflict in the region could limit employment opportunities for Pakistani workers, nearly six million of whom are currently employed across Middle Eastern countries.
Each year, around 700,000 to 800,000 Pakistanis travel to Gulf states for work. However, the study estimates that if the crisis continues, roughly 500,000 prospective workers may be unable to secure jobs abroad in 2026.
Officials also warned that an additional 500,000 Pakistanis could return from Gulf countries if economic activity in the region slows, potentially increasing pressure on the domestic labor market and unemployment levels.
Dependence on Gulf remittances
Pakistan remains heavily reliant on remittances, which contribute approximately 10 percent to the national economy. Key labor markets for Pakistani workers include Saudi Arabia and the United Arab Emirates, both of which could be affected by regional instability.
To mitigate these risks, PIDE recommended that Pakistan diversify its overseas employment destinations and create new job opportunities in other regions. Such measures could reduce dependence on Gulf economies and help safeguard vital remittance flows amid geopolitical uncertainty.
