RIYADH: Saudi Arabia's exports reached $3.2 billion in June, reflecting a year-on-year increase of 11.32 percent, according to the latest data from the Saudi Central Bank, also known as the SAMA.
This figure highlights the role of the State in global financial flows and is evidence of economic dynamics affecting the region.
The latest SAMA bulletin showed that the remittances of the Kingdom's citizens abroad decreased by 1 percent annually, which is SR5.12 billion. This followed the peak in May, which was the highest value recorded in a year and a half.
Saudi Arabia has long been a magnet for expats looking for lucrative jobs. With its strong economic growth and high wages, the Kingdom offers an attractive destination for professionals from all over the world.
The average executive salary in Saudi Arabia is more than $100,000 per year, which is not only among the highest in the Middle East but also sets global standards. This competitive compensation is a major draw for expatriates, who contribute to the State's revenue outflow.
The increase in funding can be attributed to several interrelated factors. The recovery of the labor market after the COVID-19 epidemic has led to increased employment and, as a result, higher incomes for expatriates. In addition, the Saudi government's strategy to attract and retain foreign workers, including favorable labor policies and incentives, has further strengthened the foreign workforce.
Technological advances have also played a major role in facilitating this growth. Innovations in financial technology and mobile banking have made sending money abroad faster, safer and more cost-effective. With the advent of digital payment systems and mobile apps, expats can easily send money, helping to increase income.
Saudi Arabia's demographic composition provides more context for this surge in remittances. 41.6 percent of the Kingdom's population is non-Saudi, which amounts to approximately 13.4 million. This diverse expat community includes many people from countries such as Bangladesh, India, Pakistan, Yemen and Egypt. Other countries contributing to the expatriate population are Sudan, Philippines, Syria, Nepal and Jordan,
The high rate of immigration, at an average of 79 per day, reflects the appeal of the State's economic strength and its role as a center of international activity.
Saudi Arabia and the United Arab Emirates are the main players in the global remittance world. By 2022, the total remittances from the two countries will reach $79 billion. Saudi Arabia alone accounts for 39.3 billion dollars, highlighting the significant impact on the economies of recipient countries. For example, Pakistan and Bangladesh, two of the primary recipients of Saudi funding, benefit greatly from these revenues, which support households and drive economic development.
In Pakistan, Saudi Arabia is the largest source of credit inflows. From July 2022 to March 2023, the State provided 50 percent of the total remittances to the country. This is a continuation of a long-standing trend, as Saudi Arabia is a major destination for Pakistani workers. By 2023, nearly 427,000 workers were employed in Saudi Arabia, reflecting the Kingdom's role as a vital employment center for expatriates from South Asian countries.
Similarly, Bangladesh has benefited greatly from remittances from Saudi Arabia. Financial support from expatriate Bangladeshis helps to improve the standard of living and economic stability in their home country. Recipient households in Bangladesh use these funds for basic needs such as food, education and health care, as well as investing in land and modern farming techniques, which promote economic development.
Globally, financial markets have shown resilience despite economic uncertainty. During the epidemic period, despite initial fears of a recession, remittances remained stable. India, the world's largest recipient of remittances, saw only a slight decline during the pandemic and has seen a rebound in recent years.
The country was expected to shrink by 23 percent due to the economic slowdown and lower oil prices in host countries. However, it defied those expectations, maintaining its position as the largest holder, accounting for 12 percent of global remittances, with a decline of 0.2 percent. only in 2020 and an 8 percent increase in 2021.
The sustainability of the fund highlights its important role in supporting the economy and households across low- and middle-income countries.
Also worth noting is the global trend towards digital and mobile broadcasting. According to a study by IBS Intelligence in February 2024, the global digital cross-border transfer market was worth 148 billion dollars at the beginning of the year. This market is projected to grow at an annual growth rate of 12.58 percent, reaching approximately $340 billion by 2030. This growth is driven by the increasing use of mobile phones, sales of -online, and the request for fast, safe and convenient money transfer services.
In short, the increase in remittances from Saudi Arabia highlights the role of the Kingdom in the world of remittances. The combination of high wages, good working conditions, technological advances, and large expatriate populations contributes to the flow of money to countries around the world. This trend not only reflects the economic dynamics of the region but also highlights the vital support that expatriates provide to their families and the economy in their home countries.
