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Foreign workers in Saudi Arabia remitted home record high funds of more than $29 billion in 2010, maintaining its position as the region’s largest source of hard currency for labour-export nations, a newspaper said on Thursday.
The sum surpassed the previous record remittances of about SR96.6 billion ($25.7 billion) siphoned out by the Gulf Kingdom’s nearly 8.4 million expatriates, the London-based Saudi Arabic language daily Asharqalawsat said.
“Remittances by the expatriates in Saudi Arabia reached around SR110 billion ($29.3 billion) in 2010,” the paper said, quoting Saeed Al Shaikh, chief economist at National Commercial Bank (NCB), the country’s largest bank by assets.
“The funds do not include money transferred outside the banking system or those take by foreign workers travelling to their countries.”
Saudi Arabia, the largest Arab economy and the world’s top oil exporter, has remained as the biggest source of hard currency in the region for labour-supplying nations in the Arab world, Asia and other regions.
The UAE, the second largest Arab economy, has maintained its position as the second biggest source of outgoing financial transfers by foreigners.
Bankers estimate the more than six million expatriates in the UAE have remitted home over $100 since 2000.
Shaikh said the funds transferred by foreigners in 2010 were the largest ever and sharply exceeded the remittances of around SR70 billion ($18.6 billion) in 2008 although oil prices climbed to their highest level during that year.
“Heavy transfers by foreigners put pressure on the economy and adversely affect the Kingdom’s current account,” Shaikh said.
“You should know that one riyal that is spent inside the Kingdom can generate at least two riyals in the economic cycle…this means that the SR96 billion transferred in 2009 could have boosted the country’s national income by at least SR180 billion had they been spent in the local market.”
Despite the massive foreign remittances, Saudi Arabia’s current account has remained in surplus most of the years because of high oil exports.
In 2008, when crude prices peaked at an average $95 a barrel, the Kingdom’s current account recorded a record high surplus of around $132.3 billion. It tumbled to $22.8 billion in 2009 due to lower crude prices before sharply rebounding to $66.8 billion in 2010 as a result of a $15 oil price increase.
According to the Riyadh-based Jadwa Investments, the surplus could nearly double to $130.2 billion in 2011 due to a sharp rise in crude prices and production by Saudi Arabia.
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