Coronavirus: Saudi Arabia remittances increase in Q1 despite outbreak

A Saudi money changer displays Saudi Riyal banknotes at a currency exchange shop in Riyadh, Saudi Arabia July 27, 2017. (Faisal Nasser, Reuters)

Remittances sent from Saudi Arabia increased in the first quarter of this year compared to last year, despite declining economic activity across sectors due to coronavirus.

In the first three months of 2020, money sent by migrant workers to their home countries increased by 2.3 percent, totaling 43.65 billion Saudi riyals ($11.63 billion), up from 42.66 billion during the same period in 2019, according to figures from the Saudi Arabian Monetary Authority (SAMA, reported the Saudi Gazette.

Read the latest updates in our dedicated coronavirus section.

Coronavirus still hit remittances hard in the Kingdom, with first quarter data ending in March not representing the full story of the virus’ impact.

In April, as the economic fallout of the virus began to hit, remittances dropped by 20 percent compared to March 2020, local paper Al-Eqtisadiah reported. Compared to April 2019, remittances for April this year had fallen around 42 percent.

Similar situations have played out across the region. In Dubai, one exchange shop reported that remittances were down 65 percent in April.

More than 800 million people globally receive remittances sent by family members, and about 1 billion people either send or receive them, according to UN statistics. Many families rely on individuals sending money back from the Arabian Gulf to buy necessities.

In 2020, remittance flows to low- and middle-income countries are expected to fall by nearly 20 percent to $445 billion, largely due to the coronavirus pandemic, according to the World Bank.

Remittance levels in the Kingdom have declined for four consecutive years, with 2019 seeing an 8 percent drop from 2018.

Under Saudi Arabia’s Vision 2030, of which nationalization of the work force is an aspect, businesses need to increase the number of Saudi Arabian nationals working in various sectors.

As the number of Saudi citizens employed in the private sector has increased, demand for foreign national workers has decreased, having a corresponding impact on the total amount of remittances leaving the Kingdom.

SHOW MORE
Last Update: Tuesday, 02 June 2020 KSA 14:09 - GMT 11:09
Top