RIYADH: Expatriate remittances from Ƶ reached $3.2 billion in June, reflecting an annual increase of 11.32 percent, according to the latest data from the Saudi Central Bank, also known as SAMA.
This figure underscores the Kingdom’s significant role in global remittance flows and is a testament to the economic dynamics influencing the region.
The latest SAMA bulletin indicated that remittances sent abroad by the Kingdom’s nationals decreased by 1 percent annually, totaling SR5.12 billion. This follows a peak in May, which was the highest value recorded in a year and a half.
Ƶ has long been a magnet for expatriates seeking lucrative job opportunities. With its robust economic growth and high salary levels, the Kingdom offers an attractive destination for professionals from around the world.
The average executive salary in Ƶ exceeds $100,000 annually, according to expat.com, which is not only among the highest in the Middle East but also sets a global benchmark. This competitive compensation is a major draw for expatriates, contributing to the Kingdom’s substantial remittance outflows.
The growth in remittances can be attributed to several interrelated factors. The recovery of the job market in the wake of the COVID-19 pandemic has led to increased employment opportunities and, consequently, higher earnings for expatriates. Additionally, the Saudi government’s strategies to attract and retain foreign workers, including favorable employment policies and incentives, have further bolstered the expatriate workforce.
Technological advancements have also played a pivotal role in facilitating this growth. Innovations in financial technology and mobile banking have made sending money abroad faster, more secure, and less expensive. With the advent of digital payment systems and mobile apps, expatriates can now transfer funds with ease, contributing to the rising volume of remittances.
The demographic composition of Ƶ provides further context for this surge in remittances. Non-Saudis represent 41.6 percent of the Kingdom’s population, amounting to approximately 13.4 million individuals, according to research conducted by Global Media Insight as of July 2024. This diverse expatriate community includes significant numbers from countries such as Bangladesh, India, Pakistan, Yemen, and Egypt. Other countries contributing to the expatriate population include Sudan, the Philippines, Syria, Nepal and Jordan.
The high net migration rate, averaging 79 individuals per day, reflects the Kingdom's strong economic appeal and its role as a hub for international labor, the research report said.
Ƶ and the UAE are key players in the global remittance landscape. In 2022, the combined remittance outflows from these two countries totaled around $79 billion, according to a February study by IBS Intelligence. Ƶ alone accounted for $39.3 billion, the study showed, highlighting its significant impact on the economies of remittance-receiving countries. For instance, Pakistan and Bangladesh, two of the primary recipients of Saudi remittances, benefit immensely from these financial inflows, which support households and drive economic development.
Ƶ was the top source of remittance inflows to Pakistan from July 2022 to March 2023, according to the International Organization for Migration. The Bureau of Emigration and Overseas Employment reported that Ƶ remains the primary source of remittance inflows to Pakistan, contributing 50 percent, and continues to be the top destination for Pakistani workers registered for overseas employment in 2023.
Similarly, Bangladesh has been a significant beneficiary of remittances from Ƶ. The financial support from Bangladeshi expatriates contributes to improved living standards and economic stability in their home country. According to the UN Relief Web, remittance-receiving households in Bangladesh use these funds for essential needs such as food, education, and healthcare, as well as for investments in land and modern farming techniques, thereby fostering economic development.
Globally, the remittance market has shown resilience despite economic uncertainties. According to World Bank data, during the pandemic, while there were initial fears of a downturn, remittances remained relatively stable. India, the top recipient of global remittances, experienced only a minor decline during the pandemic and saw a rebound in subsequent years.
The country was expected to face a significant decline of 23 percent due to economic slowdowns and falling oil prices in host countries. However, it defied these expectations, maintaining its position as the top recipient, accounting for 12 percent of global remittances, with only a 0.2 percent decline in 2020 and an 8 percent growth in 2021.
The resilience of remittances highlights their critical role in supporting economies and households across low- and middle-income countries.
The broader global trend toward digital and mobile remittances is also noteworthy. According to a February 2024 study by IBS Intelligence, the global digital cross-border transfers market was valued at $148 billion at the start of the year. This market is projected to grow at a compound annual growth rate of 12.58 percent, reaching approximately $340 billion by 2030. This growth is driven by increased mobile phone usage, online shopping, and the demand for quick, secure, and convenient money transfer services.
In summary, the increase in expatriate funds transfer from Ƶ highlights the Kingdom’s pivotal role in the global remittance landscape. The combination of high salaries, favorable employment conditions, technological advancements, and a significant expatriate population contributes to the robust flow of funds to countries around the world. This trend not only reflects the economic dynamics of the region but also underscores the vital support expatriates provide to their families and economies back home.
