Expat remittances from KSA hit $3.2 billion in March
The upswing is the highest since June 2022, central bank data shows
Remittances by expatriates in Saudi Arabia grew 28 percent in March as compared to the preceding month to reach SR11.96 billion ($3.2 billion), the highest since 2022, official data showed.
The launching of new development projects in the Kingdom has led to an increase in the expatriate population, as they actively contribute to the growth of business activities. This, in turn, may have influenced their remittance patterns.
This growth in remittances is also exemplified by the Regional Headquarters Program, which has successfully attracted over 200 companies from across the globe to obtain licenses to set up their regional bases in Saudi Arabia.
These entities are driven by the prospect of securing lucrative government contracts. Additionally, the ongoing structural reforms to enhance foreign direct investment have further stimulated business growth in the Kingdom.
Alongside regulatory reform, Saudi Arabia has undergone modernization in its legal governance and enforcement practices such as digitization of employment contracts, virtual court hearings, and provision of online government services. These initiatives are integral components of a broader set of reforms aimed at positioning the Kingdom as one of the leading nations in terms of ease of doing business.
However, on a quarterly basis, there was a 0.34 percent decrease in expat remittances compared to the same period last year. This trend can be attributed to Saudi Arabia’s evolving economic landscape, particularly the implementation of financial sector reforms, which are increasingly enticing residents to invest a portion of their earnings within the Kingdom.
In February of this year, a report by Jadwa Investment noted that workers’ remittances were unexpectedly low despite the influx of expatriates.
This phenomenon according to their report may suggest that some expatriates opted to capitalize on the high savings rates in the Kingdom instead of remitting funds home.
The Saudi Central Bank, also known as SAMA, has raised key policy rates multiple times in 2022 and 2023, given that the Saudi currency is pegged to the
dollar. This move aligns with the actions taken by the US Federal Reserve, which has been gradually increasing interest rates as part of its strategy to address inflationary pressures. Conversely, remittances from Saudis saw a 9 percent monthly increase, totaling SR5.11 billion, yet experienced a quarterly decline of 0.53 percent.
The occurrence of Ramadan in March this year likely influenced the increase in Saudi remittances for this month. During this holy month, individuals often engage in increased charity, support their families, and fulfill religious obligations, such as zakat.