عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Foreign Remittances from Saudi Arabia Reach Highest Level Since 2022

Wage improvements in certain sectors contributed to higher disposable incomes (Photo: Reuters)
Wage improvements in certain sectors contributed to higher disposable incomes (Photo: Reuters)
TT
TT

Foreign Remittances from Saudi Arabia Reach Highest Level Since 2022

Wage improvements in certain sectors contributed to higher disposable incomes (Photo: Reuters)
Wage improvements in certain sectors contributed to higher disposable incomes (Photo: Reuters)

Foreign remittances from Saudi Arabia saw a notable increase of 14% in 2024 compared to the previous year, reaching SAR144 billion ($38.4 billion), the highest level since 2022, according to data from the Saudi Central Bank (SAMA). Experts attribute this surge to rising employment rates and wage improvements in certain sectors.

In 2023, total remittances stood at SAR 126.8 billion ($33.8 billion), while in 2022, they reached SAR 143 billion ($38 billion), according to SAMA’s monthly statistical bulletin.

Economic analyst Rawan bin Rubayan linked the rise in remittances to strong economic growth and increased employment opportunities, fueled by Saudi Arabia’s ambitious Vision 2030 projects. The expansion of construction and service sectors has particularly driven the demand for foreign labor.

She highlighted in remarks to Asharq Al-Awsat that the number of non-Saudi workers in the private sector rose to 8.9 million in 2024, a 3.5% increase year-on-year, directly impacting remittance volumes.

Additionally, wage improvements in certain sectors contributed to higher disposable incomes. In 2024, the average monthly salary for foreign workers in construction and services rose to SAR4,200 ($1,119), up from SAR3,850 ($1,026) in 2023. The stable exchange rate of the Saudi riyal at SAR3.75 per US dollar also supported remittance growth.

Another contributing factor was the rising cost of living in Saudi Arabia. The Consumer Price Index (CPI) increased by 2.5% in 2024, pushing many expatriates to send a larger portion of their earnings back home. Rent and essential service prices also saw an upward trend.

According to Mohammed Al-Farraj, Senior Asset Management Executive at Arbah Capital, multiple factors drove the remittance surge, including a growing expatriate workforce, economic recovery in expatriates’ home countries, stable exchange rates, and advancements in financial services that facilitate money transfers.

Speaking to Asharq Al-Awsat, Al-Farraj explained that while rising remittances increase outbound cash flows, potentially impacting Saudi Arabia’s balance of payments, the effect on domestic liquidity remains limited. According to SAMA’s November 2024 report, remittances accounted for 5.25% of total bank deposits in Saudi Arabia.

However, predicting whether this trend will continue remains uncertain. Al-Farraj noted that factors such as changes in Saudi labor market policies, global economic conditions, and the evolution of digital banking technologies will determine the trajectory of remittances in the coming years.

Most Viewed

 
 
Business

Auto Industry Rocked by Trump's 25% Tariffs on US Imports

New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
TT
TT

Auto Industry Rocked by Trump's 25% Tariffs on US Imports

New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)

US automakers and their global rivals were rocked on Wednesday by President Donald Trump's announcement that he would impose 25% tariffs on all vehicles and foreign-made auto parts imported into the United States.
The new levies, if kept for an extended period, could add thousands of dollars to the cost of an average US vehicle purchase and impede car production across North America.
That will be because of the intertwined manufacturing operations developed by car makers across Canada, Mexico and the United States over the last three decades.
Nearly half of all cars sold in the US last year were imported, research firm GlobalData says, according to Reuters.
In response to the news, shares of General Motors slumped 8% in after-market trading. Shares in Ford and US-traded shares of Chrysler-parent Stellantis fell about 4.5% each.
In Asia, shares in Toyota Motor, Honda Motor and Hyundai Motor all fell between 3% and 4%.
Shares in Tesla, which makes all the cars sold in the United States locally but with some imported parts, were down 1.3%.
Trump said the duties announced on Wednesday could be a net neutral or even good for Tesla, adding that its CEO, and his close ally, Elon Musk, did not advise him regarding auto tariffs.
In a post on X following the news, Musk said the tariffs would also affect Tesla.
"This will affect the price of parts in Tesla cars that come from other countries," he wrote in another post on X. "The cost impact is not trivial."
The companies did not immediately return emails seeking comment.
Trump's tariffs and threats to impose them have sowed uncertainty in businesses and roiled global markets since he returned to the White House in January.
On Wednesday, Trump reiterated that he expected the auto tariffs to prompt automakers to boost investment in the United States, instead of Canada or Mexico.
Autos Drive America, a group representing major foreign automakers such as Honda, Hyundai, Toyota and Volkswagen , said the "tariffs imposed today will make it more expensive to produce and sell cars in the United States, ultimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the US."
Automakers in North America have largely enjoyed free trade status since 1994. Trump's 2020 US-Mexico-Canada Agreement (USMCA) imposed new rules designed to spur regional content production.
After clamping tariffs of 25% on Mexico and Canada in early March, Trump allowed a one-month reprieve for vehicles produced in compliance with the terms of his USMCA, which benefited American companies.
The new rules do not extend that reprieve.
"Companies that have invested hundreds of millions and billions of dollars on plants in Canada and Mexico will likely see their profits cut dramatically over the next few quarters, if not into a couple years," said Sam Fiorani, analyst at AutoForecast Solutions.
"We're going to look at adjusting our sales and production forecasts because this will throw everything into chaos."
The White House said that 25% tariffs on automotive parts imported to the US would take effect no later than May 3, taxing key items such as engines, transmissions, powertrain parts, and electrical components.
Importers of automobiles under the USMCA will get the chance to certify their US content so that only non-US content is taxed, the White House said.
Before the unveiling of the new tariffs, Cox Automotive, an automotive services provider, predicted they would add $3,000 to the cost of a US-made vehicle and $6,000 on vehicles made in Canada or Mexico, without exemptions.
If tariffs go through, by mid-April Cox expects disruption to "virtually all" North American vehicle output, leading to 20,000 fewer vehicles a day, or a hit of about 30% to production.
The United Auto Workers union, which represents factory workers at Big Three Detroit automakers, praised Trump's action.
"With these tariffs, thousands of good-paying blue collar auto jobs could be brought back to working-class communities across the United States within a matter of months, simply by adding additional shifts or lines in a number of underutilized auto plants," UAW President Shawn Fain said in a statement.