Expat remittances from Saudi Arabia hit $3.4bn in February, a 37% annual growth

16/04/2025 03:11 AST

Expatriate remittances from Saudi Arabia surged to SR12.78 billion ($3.41 billion) in February, marking a 37.04 percent increase compared to the same month last year, according to recent data.

Figures from the Saudi Central Bank, also known as SAMA, also reveal transfers made by Saudi nationals rose 33.53 percent during the same period to reach SR6.24 billion.

This surge reflects a combination of domestic labor market momentum and broader international factors.

The sharp rise is largely attributed to the Kingdom's accelerating economic activity, particularly the rollout of Vision 2030 megaprojects, which has driven strong demand for foreign labor. As hiring increased, wage growth in key sectors also improved, giving expatriate workers greater sending power.

According to Tuscan Consulting's 2025 Salary Guide for the UAE and Saudi Arabia, salary trends in both countries are influenced by economic growth, talent demand, and nationalization policies.

In the Kingdom, the surge in Vision 2030 megaprojects has intensified the demand for skilled professionals, leading to competitive compensation packages, particularly in sectors like technology, finance, and healthcare. While salary increases have moderated compared to the post-pandemic period, employers continue to offer attractive incentives to retain top talent.

The guide also noted that Saudi salaries for specific roles are approximately 10-15 percent higher than those in the UAE, reflecting Saudi Arabia's aggressive talent acquisition strategies. Additionally, implementing Saudization policies is reshaping workforce dynamics, prompting companies to balance attracting expatriates and integrating local talent.

Supportive macroeconomic conditions further strengthened remittance flows. The Kingdom's stable currency, zero tax on personal income and remittances, and enhanced financial transfer channels made it easier and more cost-effective for workers to send money abroad.

However, remittance dynamics are also shaped by ongoing labor market policies in the Kingdom. Initiatives such as Saudization, which aims to increase the participation of Saudi nationals in the private sector, and expat levies, which impose fees on foreign workers and their dependents, have influenced hiring practices and workforce composition.

While these measures are intended to create more opportunities for citizens and reduce reliance on foreign labor, they may also gradually moderate remittance outflows over time by curbing the growth of the expatriate workforce.

Nonetheless, in the near term, the pace and scale of Vision 2030 megaprojects continue to drive high demand for foreign labor, particularly in construction, infrastructure, and services - supporting strong remittance flows despite structural shifts in employment policy.

At the same time, the economic conditions in expatriates' home countries have also played a role. In 2023, several top remittance-receiving nations, including Egypt, faced significant economic challenges.

For instance, a currency crisis in Egypt caused the official exchange rate to diverge sharply from the parallel market, leading many expatriates to delay transfers or resort to informal channels. As a result, remittances to Egypt dropped 31 percent in 2023, according to a 2024 report by the World Bank Group.

Looking ahead, oil prices, local employment policies, and global economic conditions - especially in expatriates' home countries - will shape the future of remittance flows from Saudi Arabia. While US tariffs don't directly affect the Kingdom, their ripple effects could. Slower global growth from trade tensions may weaken oil demand, affecting Saudi revenues and potentially delaying projects that employ many foreign workers. A stronger US dollar could also raise living costs in the Kingdom, reducing the money expatriates can send home. If Saudization accelerates, fewer foreign workers may further lower remittance outflows.

Arab News