Driven by a 21% annual increase, Saudi expatriate remittances in 2024 reflect the kingdom’s robust economic policies and labour market, with expatriates sending record amounts abroad

In July 2024, expatriate remittances from Saudi Arabia reached an impressive 25-month peak, totalling SR12.91 billion ($3.44 billion). This represents a 21% increase compared to the same period last year, according to data from the Saudi Central Bank, also known as SAMA. Additionally, funds sent abroad by Saudi nationals also rose slightly by 0.25%, amounting to SR5.81 billion. These figures highlight the strong growth in Saudi expatriate remittances in 2024, reflecting the economic contributions of the expatriate community.

This surge in remittances follows a notable peak in May when Saudi expatriates sent the highest value of funds recorded over the previous 18 months. The consistent rise in remittances underscores Saudi Arabia’s significant role as one of the world’s largest remittance-sending nations, driven by its strong economic policies and labour market conditions.

With nearly 75% of the Kingdom’s labour force consisting of foreign workers, Saudi Arabia’s remittance system is vital not only for the local economy but also for the global financial landscape. These funds support millions of households worldwide, particularly in developing countries where remittances constitute a crucial source of income. The increase in Saudi expatriate remittances in 2024 underscores the significant role these funds play in enhancing economic stability both locally and internationally.

According to a report from the US Department of State, Saudi Arabia has no restrictions on converting or transferring funds related to investments, dividends, or earnings. This policy ensures that expatriates can seamlessly send their earnings to their home countries without any waiting periods. The Ministry of Human Resources and Social Development’s Wage Protection System further bolsters this flow of money. The system mandates that employers transfer workers’ salaries to local Saudi bank accounts, ensuring transparency and accountability while making it easier for expatriates to send remittances.

In recent years, the remittance sector in Saudi Arabia and the broader Middle East and North Africa (MENA) region has undergone a significant transformation, spurred by the rise of digital platforms. Traditionally, remittances were sent through physical channels such as banks and exchange houses. However, technological advancements have introduced more efficient, convenient, and cost-effective solutions.

The widespread adoption of smartphones and internet access has made digital remittance platforms more popular, allowing users to send money across borders with just a few clicks. These digital solutions offer numerous advantages, such as competitive exchange rates, lower transaction fees, and faster processing times, with some transfers completed almost instantly. For many families relying on timely financial support, the speed and ease of digital transactions are crucial.

Financial institutions and fintech companies have embraced this digital revolution, developing mobile apps, online portals, and digital wallets to improve the remittance experience for expatriates. This technological shift has also enhanced financial inclusion, particularly for migrant workers and individuals living in remote areas who previously lacked access to banking services.

Saudi regulators have played a key role in facilitating the rise of digital remittances by implementing policies that promote consumer protection, foster competition, and create a secure ecosystem for digital financial services. This regulatory framework has encouraged fintech companies to innovate while operating within defined guidelines.

Looking ahead, the remittance industry is expected to evolve further with the integration of emerging technologies like blockchain and artificial intelligence. These technologies promise to make remittance services even more efficient, secure, and accessible, ensuring that Saudi expatriate remittances in 2024 continue to support their families back home.

Analysis

Political: Saudi Arabia’s remittance policies are deeply tied to its political strategy and economic reforms under Vision 2030. The Kingdom’s proactive stance on enabling seamless cross-border transactions supports its long-term goals of economic diversification and global integration. By ensuring that expatriates can easily send money home, the government maintains a positive relationship with its large foreign workforce, which is vital for various sectors, including construction, manufacturing, and services. Moreover, Saudi Arabia’s significant role in global remittance flows strengthens its diplomatic and economic ties with countries that benefit from these financial inflows, particularly in South Asia and Africa.

Social: The surge in remittances highlights the important role expatriates play in Saudi Arabia’s economy and their strong connections to families in their home countries. The remittance system not only supports the livelihoods of millions of people abroad but also influences social structures in expatriates’ countries of origin. For many, remittances are essential for daily expenses, healthcare, education, and other crucial needs. As digital platforms make it easier to transfer money, expatriates can provide more consistent support, improving the well-being of families and contributing to social stability in regions reliant on these financial inflows.

Gender: Remittances are a lifeline for many women in developing countries who depend on family members working abroad. As digital remittance platforms become more accessible, women who manage household finances can receive funds more efficiently and securely. Moreover, the rise of digital platforms promotes financial inclusion for women in rural or underserved areas, granting them greater access to financial services. On the other hand, Saudi Arabia’s evolving labor market may also present opportunities for women expatriates, particularly in sectors like healthcare and education, to contribute to the remittance system and support their families back home.

Economic: Economically, the rise in Saudi Arabia’s remittances reflects the Kingdom’s sustained economic vitality and its interconnectedness with the global economy. By enabling a robust remittance infrastructure, Saudi Arabia ensures the continuous flow of capital to countries where remittances are a critical source of foreign exchange. This contributes to global financial stability and economic development, particularly in emerging markets. Additionally, the integration of digital platforms and technologies into the remittance sector reduces transaction costs and increases efficiency, benefiting both expatriates and recipients. The remittance boom also indicates that the Saudi economy is performing well enough to support a large expatriate workforce, which is crucial for sectors like construction and services.