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How much money are you sending home?
Reports say that remittances from expatriates in the UAE are rising constantly. But will job insecurities and smaller savings slow the money flow down?
June 3, 2009 8:18 by kippreport
Expatriates in the UAE remit more than AED36.75 billion ($10 billion) to their home countries per annum, says a report by Money Transfer International, a global trade body. According to Premal Patel, MTI’s regional director, remittances from the UAE to Pakistan in March alone reached $174 million.
“The GCC region is one of the top five performers of the global remittance industry which was pegged at $550 billion in 2008,” he said, adding that the UAE is the second highest performer in the GCC after Saudi Arabia.
MTI date also estimates that the UAE could become the third largest sender of remittances worldwide in the future.
A report from the International Monetary Fund (IMF) earlier this year claimed that the UAE’s remittances in 2008 rose by $1.3 billion over 2007. It estimated that the amount will increase by five percent this year despite the global financial crisis.
According to a recent report in Emirates Business, the Abu Dhabi Chamber of Commerce and Industry said in a study that “Around 78 percent of the expatriates remitting funds are Asian workers, most of whom are low income and unskilled labor. They remit home nearly 80 percent of their income as their spending in the UAE is restricted to essential needs.”
If Asian expatriates are sending home the maximum amount of money, their home countries may start seeing smaller money transfers because of the financial crisis. A survey by research company TNS says that 57 percent of Asian expatriates in the UAE are currently worried about their job security, reports Arabian Business.
The survey found that 75 percent of Asian expatriates say that rising inflation is threatening their lifestyle, and that 54 percent of them feared financial security.
“Consumers are looking to cut back on big ticket items and postponing holidays,” said Satish Dave, senior director of TNS Middle East and Africa. “Even consumers who had a sense of job security seemed to have been impacted by this negative sentiment.”
A report from the Ministry of Economy says that annual inflation in the UAE stood at 4.94 percent in the first four months of the year. Food and beverage costs increased 4.84 percent and housing costs went up by 4.99 percent as compared to the same period a year ago.
However, the report also says that consumer prices fell 2.7 percent between January and April 2009, even as house prices in the country continue to fall.
With greater financial insecurity and higher costs than the previous year, expatriates may have a tough time sending money back