RIYADH, Aug 11 (Arab News): Expatriate remittances from Saudi Arabia reached $3.2 billion in June, reflecting an annual increase of 11.32 per cent, 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 per cent annually, totaling SR5.12 billion. This follows a peak in May, which was the highest value recorded in a year and a half.
Saudi Arabia 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 Saudi Arabia exceeds $100,000 annually, 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 Saudi Arabia provides further context for this surge in remittances. Non-Saudis represent 41.6 per cent of the Kingdom's population, amounting to approximately 13.4 million individuals. 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.
Saudi Arabia 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. Saudi Arabia alone accounted for $39.3 billion, 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.
In Pakistan, Saudi Arabia remains the largest source of remittance inflows. From July 2022 to March 2023, the Kingdom contributed 50 per cent of the total remittances to the country. This is a continuation of a longstanding trend, as Saudi Arabia has historically been a major destination for Pakistani workers. In 2023, nearly 427,000 workers were employed in Saudi Arabia, reflecting the Kingdom's ongoing role as a vital employment hub for expatriates from the South Asian country.
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