Expatriate remittances from Saudi Arabia rose 11.32 percent annually to $3.2 billion in June, reflecting the Kingdom’s position as a hub for job opportunities in the region and a major player in global remittance flows. The latest bulletin from the Saudi Central Bank (SAMA) also reveals that remittances from Saudi nationals declined by 1 percent annually to $1.36 billion from their highest level since November 2022 of $1.64 billion in May 2024.
Job market recovers
Several factors have supported the growth of remittances from Saudi Arabia, including the recovery of the job market following the COVID-19 pandemic. This led to an increase in job opportunities and higher earnings for expats. In addition, Saudi Arabia’s government has implemented several strategies to attract and retain international workers, including favorable employment policies and incentives, which have further bolstered the expat workforce.
In addition, the development of digital payment systems has eased the process of transferring funds globally, further contributing to the rise in expat remittances from Saudi Arabia. Notably, non-Saudis represent 41.6 percent of the Kingdom’s population, reaching around 13.4 million individuals. The diverse expatriate community includes significant numbers from countries such as Bangladesh, India, Pakistan, Yemen and Egypt.
In 2022, total remittance outflows from Saudi Arabia reached $39.3 billion, highlighting its significant impact on the economies of remittance-receiving countries.
Notably, Pakistan and Bangladesh are two of the main recipients of Saudi remittances. For instance, Saudi Arabia is the largest source of remittance inflows in Pakistan, accounting for 50 percent of the country’s remittances from July 2022 to March 2023.
Global remittance landscape
After a period of strong growth during 2021-2022, official remittance flows to low- and middle-income countries (LMICs) moderated in 2023, reaching around $656 billion, according to the World Bank’s latest Migration and Development Brief.
The 0.7 percent growth rate reflects large variances in regional growth. However, remittances remained a crucial source of external finance for developing countries in 2023, bolstering the current accounts of several countries grappling with food insecurity and debt issues. In 2023, remittances surpassed foreign direct investment (FDI) and official development assistance (ODA).
Read | Saudi Arabia’s FDI balance rises 6.1 percent to $217.88 billion in Q1 2024: Report
MENA remittances to grow
Looking ahead, the World Bank expects remittances to LMICs to grow at a faster rate of 2.3 percent in 2024. However, this growth will be uneven across regions. In 2023, remittance flows increased most to Latin America and the Caribbean while the Middle East and North Africa region experienced a nearly 15 percent drop to $55 billion.
The primary reason for this decline was due to a sharp decrease in flows to Egypt. Remittance flows among countries in the region were impacted by slower growth in the GCC countries. Flows, however, will likely recover by 4.3 percent in 2024.
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