Expatriate remittance jumps 5.9% to SR12.5 billion in May

E-payment system for all Saudi retailers comes into force

Personal remittances of expatriates in Saudi Arabia jumped 5.93 percent or SR701 million ($187 million), reaching about SR12.53 billion ($3.34 billion) in May 2021, compared to SR11.83 billion ($3.15 billion) in May 2020, according to the monthly bulletin issued by the Saudi Central Bank.

On a monthly basis, remittances of expatriates fell by 6 percent or SR748 million ($199 million) in May as against SR13.28 billion ($3.54 billion) in April 2021. Total remittances of expatriates in the first five months of this year amounted to 14 percent, reaching about SR63.22 billion ($16.86 billion), compared to SR55.48 billion ($14.79 billion) during the same period last year.

It is noteworthy that the remittances of expatriates jumped 19.25 percent during the year 2020, reaching SR149.69 billion ($39.92 billion), compared to SR125.53 billion ($33.47 billion) in 2019. The value of remittances during the last year was the highest since 2016, the equivalent of about the past four years.

Data from the Saudi Central Bank showed that remittances made by Saudis shot up by 72.48 percent in May 2021, reaching about SR5.13 billion ($1.37 billion), compared to about SR2.98 billion ($794 million) in May 2020.

Remittances by Saudis amounted to about SR24.94 billion ($6.65 billion) in five months of this year, compared to about SR19.25 billion ($5.13 billion) in the corresponding period of 2020, an increase of 29.6 percent.

In a previous briefing, the World Bank stated that despite the coronavirus pandemic, remittances remained resilient in 2020, as they recorded a decline less than what was indicated by previous expectations.

The most recent World Bank Migration and Development Brief showed that officially recorded remittance flows to low- and middle-income countries amounted to $540 billion in 2020, down only 1.6 percent from the total of $548 billion in 2019.

The decline in remittance flows recorded in 2020 was lower than the level recorded during the period of global financial crisis of 2009, reaching 4.8 percent, and was also much less than the decline in FDI flows to low- and middle-income countries that fell more than 30 percent, while China was an exception for this.

As a result, remittance flows to low- and middle-income countries outnumbered foreign direct investment ($259 billion) and foreign development assistance ($179 billion) in 2020.

Among the main factors of the steady influx of remittances are fiscal stimulus measures that have led to better-than-expected economic conditions in most host countries, a shift in flows from cash to digital, and from informal to formal channels, and cyclical movements in oil prices and currency exchange rates.

It is believed that the true size of remittances that include both formal and informal flows is greater than what is indicated by officially recorded data, although there is still uncertainty surrounding the extent of the impact of the coronavirus pandemic on informal flows.