Cash transfers from the GCC countries are expected to pick up again in 2010 after a slow down in 2009. The new year is believed to have a projected improvement in oil prices and better global economic prospects, a a World Bank report published by Bank Audi's MENA Weekly Monitor said. The slowdown in 2009 was due to slackening economies and layoffs from private and public sector companies, the report said. The World Bank forecasted a decline of around 9 percent in remittances from GCC in 2009 due to drop in economic activity and higher cost of living. However, there are emerging signs of a bottoming out and the economies reviving. According to the revised projections by the World Bank, global economic growth is expected to rebound to 2 percent in 2010 and 3.2 percent by 2011 after an expected contraction of 2.9 percent 2009. The report said Saudi Arabia was the second-largest remittances source after the US, with the total transfers sent from the Kingdom exceeding $20 billion in 2008. While no data is available from the World Bank, industry experts estimated the UAE remittance market at about $9 billion in 2008 while Kuwait and Qatar markets were estimated at $5 billion each. High dependence on oil resources and relatively small population size, have led the GCC countries to rely massively on foreign workers. The GCC nations became the largest source of cash transfers relative to the gross domestic product as they accounted for nearly seven percent of their GDP in 2008 against only 0.3 percent in the US. The global average growth of foreign remittances is about eight percent while it is as high as 15 percent in the GCC. As a result, expatriates population, on average, constitutes more than 50 percent of the total population with the highest being UAE and Qatar (about 80 percent) and the lowest is Saudi Arabia (26 percent). The strong presence of large migrant population makes the GCC countries among the largest remitting countries both in terms of total value and in terms of percentage of GDP. Over the past few years, the Middle East has become the fastest-growing region for money transfer and remittance industry, according to the World Bank. The remittances have been growing at an annual pace of more than 15 percent in the Middle East compared to a global growth rate of 8 percent in 2008. The sustained high growth in Middle East has been driven by many factors, the report noted. One of the main reasons includes the tendency of low-skilled foreign workers to leave their spouses and other family members in their home-countries to avoid high-living costs in GCC countries, it noted. With oil prices rising and investor confidence reviving, there are strong sign of the GCC economies on the path of recovery. Oil prices on Thursday hit $80 a barrel for the first time in seven weeks as the dollar sank on the final day of the year. Benchmark crude for February delivery added 53 cents at $79.81 a barrel on the New York Mercantile Exchange. Oil jumped as high as $80 a barrel earlier in the day. It hasn't traded for that much since Nov. 11. The World Bank forecast that all this would impact the remittances from the GCC countries positively and expect the year 2010 to witness a positive growth rate due to a lower base and faster economic growth.
