Rising tensions in the Middle East could negatively affect Pakistan’s economy and overseas workforce, potentially reducing annual remittance inflows by $3 to $4 billion, according to a report by the Pakistan Institute of Development Economics.
The report warned that prolonged conflict in the region could reduce overseas employment opportunities for Pakistanis, as nearly six million Pakistani workers are currently employed in Middle Eastern countries.
Each year, about 700,000 to 800,000 Pakistanis travel to Gulf states for jobs, but the report estimates that around 500,000 workers may be unable to secure overseas employment in 2026 if the crisis continues.
Officials also expressed concern that an additional 500,000 Pakistanis could return from Gulf countries if economic activity slows in the region, potentially increasing pressure on Pakistan’s domestic job market.
The study noted that Pakistan remains heavily dependent on remittances, which account for roughly 10 percent of the national economy. Countries such as Saudi Arabia and the United Arab Emirates remain the largest labour markets for Pakistani workers.
PIDE recommended that Pakistan diversify its overseas employment destinations and create new opportunities in other regions to reduce reliance on Gulf economies and protect remittance flows.