Expat remittances fall to 10-year-low in 2021
Beneficial impact: Gross national savings rise 78.7% in 2021, buoyed by increase in gross domestic savings and lower current transfers abroad: CBO
Published: 03:02 PM,Feb 04,2023 | EDITED : 01:02 AM,Feb 05,2023
MUSCAT: Expatriate remittances declined 7.5 per cent to around RO 3.120 billion in 2021, the Central Bank of Oman (CBO) revealed in its newly released Annual Report for the year.
The slump, coming on top of a 4.0 per cent drop in remittance outflows during the previous year, was attributed to a sharp fall in the size of the expatriate workforce that year, fuelled by the global economic downturn and compounded further by widespread disruptions unleashed by the pandemic.
“Leakage of savings in the form of current transfers (mainly workers’ remittances abroad) declined by 7.5 per cent during 2021, reflecting the decline in expatriate workers,” the apex bank noted in its report.
Significantly, remittances have been on a downward trend since 2015, when outflows hit a peak of RO 4.226 billion. The decline, of late, has mirrored a significant uptick in expatriate departures in the wake of the pandemic-induced economic downturn.
According to the National Centre for Statistics and Information (NCSI), the number of expatriates working in the Sultanate of Oman plummeted to around 1.443 million in 2020 at the end of the first full year of the pandemic, down from 1.712 million in 2019. Their numbers further sank to 1.409 million in 2021, but have since rebounded to pre-pandemic levels in 2022 following a strong revival of the Omani economy.
On the flipside, gross domestic savings surged 30.5 per cent in 2021, coming on the back of a 34.6 per cent contraction during the previous year amid widespread business and economic impacts, as well as job losses, caused by the pandemic.
“The increase in gross domestic savings and lower current transfers abroad led to a significant growth of 78.7 per cent in gross national savings in 2021, against a decline of 55.4 per cent in 2020. Gross domestic savings to GDP ratio improved to 33.5 per cent in 2021 from 29.9 per cent a year ago, while gross national savings to GDP ratio increased to 17.5 per cent from 11.4 per cent in 2020,” the Central Bank stated.
The slump, coming on top of a 4.0 per cent drop in remittance outflows during the previous year, was attributed to a sharp fall in the size of the expatriate workforce that year, fuelled by the global economic downturn and compounded further by widespread disruptions unleashed by the pandemic.
“Leakage of savings in the form of current transfers (mainly workers’ remittances abroad) declined by 7.5 per cent during 2021, reflecting the decline in expatriate workers,” the apex bank noted in its report.
Significantly, remittances have been on a downward trend since 2015, when outflows hit a peak of RO 4.226 billion. The decline, of late, has mirrored a significant uptick in expatriate departures in the wake of the pandemic-induced economic downturn.
According to the National Centre for Statistics and Information (NCSI), the number of expatriates working in the Sultanate of Oman plummeted to around 1.443 million in 2020 at the end of the first full year of the pandemic, down from 1.712 million in 2019. Their numbers further sank to 1.409 million in 2021, but have since rebounded to pre-pandemic levels in 2022 following a strong revival of the Omani economy.
On the flipside, gross domestic savings surged 30.5 per cent in 2021, coming on the back of a 34.6 per cent contraction during the previous year amid widespread business and economic impacts, as well as job losses, caused by the pandemic.
“The increase in gross domestic savings and lower current transfers abroad led to a significant growth of 78.7 per cent in gross national savings in 2021, against a decline of 55.4 per cent in 2020. Gross domestic savings to GDP ratio improved to 33.5 per cent in 2021 from 29.9 per cent a year ago, while gross national savings to GDP ratio increased to 17.5 per cent from 11.4 per cent in 2020,” the Central Bank stated.