RIYADH — Foreign remittances from Saudi Arabia recorded a significant increase of 14 percent on an annual basis during the year 2024, reaching SR144 billion ($38.4 billion), which marks the highest level since 2022, according to the monthly statistical bulletin issued by the Saudi Central Bank (SAMA). The volume of remittances amounted to SR126.8 billion ($33.8 billion) in 2023, compared to SR143 billion ($38 billion). The increase was mainly influenced by the growth in employment rates and the improvement of wages in some sectors, according to a report in Asharq Al-Awsat newspaper. Economic analyst Rawan bint Rabian attributed this increase to strong economic growth, in addition to increased employment. "The expansion in implementing Vision 2030 projects led to a surge in demand for foreign labor, especially in the construction and services sectors. The data indicates that the number of non-Saudi workers in the private sector increased to 8.9 million in 2024, an increase of 3.5 percent on an annual basis, which was directly reflected in the volume of remittances," she said. Rawan reported that some sectors witnessed an improvement in salaries, as the average monthly wages for foreign workers in the construction and services sector reached SR4,200 ($1,119) compared to SR3,850 ($1,026) in 2023, which increased the volume of transferable income. The stability of the Saudi riyal against foreign currencies also contributed to supporting the growth of remittances, as the exchange rate remained stable at SR3.75 to the US dollar. She said that the rising cost of living in Saudi Arabia played a role in increasing remittances, as the consumer price index rose by 2.5 percent in 2024, prompting many to send a larger portion of their income abroad, in addition to the growth in rental prices and basic services. Mohammed Al-Faraj, senior director of Asset Management at Arbah Capital, attributed this increase to several key factors, including the increase in the number of foreign workers, the improvement of economic conditions in some countries to which foreign workers belong, the stability of exchange rates, and the development of financial services that facilitate the movement and transfer of funds. Al-Faraj said that this increase is reflected in the Saudi economy in several ways, including increased outward cash flows, which may affect the balance of payments, and a limited impact on local liquidity, as remittances represent 5.25 percent of total deposits in Saudi banks, according to the SAMA report for November 2024. "It is difficult to predict the continuation of this trend in the coming years, as it depends on several factors, including changes in the local labor market, global economic conditions, technological developments, and digital banks," he noted.
