You are here

Rise in remittances in first half of 2017 is ‘positive’ — experts

New decision by Saudi Arabia to levy tax on expats with families is expected to impact levels of remittances

By Ahmed Bani Mustafa - Jul 11,2017 - Last updated at Jul 11,2017

AMMAN — Economists consider increased remittances from Jordanians working abroad in the first five months of this year as "positive" and "natural".

According to figures by the Central Bank of Jordan (CBJ), remittances of expats stood at JD1.05 billion until May, nearly JD17 million more than remittances during the same period of 2016, marking a 1.5 per cent increase.

With the majority of Jordanians abroad working in oil-rich Gulf countries, analysts noted that the increase in cash transfers was closely related to CBJ measures.

Analyst and columnist at Al Rai daily Issam Qadamani said that the transfers increased as a result of a raise in the interest rate twice this year, which has encouraged expats to deposit.

The interest rate increase will continue to enhance confidence in the Jordanian Dinar, Qadamani said.

However, the government has to work on encouraging expats to invest their money rather than leaving it in the bank, in order to stimulate the national economy, he noted.

Regarding Saudi Arabia's new decision of levying a tax on expats with families, the analyst said it carries a negative impact on expats' savings.

Starting next month, Saudi Arabia is set to collect a new monthly fee of 100 riyals (JD19) for every expat, with plans to gradually increase the fee each year until 2020.

For economist Mazen Irsheid, the remittances hike is to be explained by the period itself.

“Expats return to Jordan in the summer and their remittances naturally drop. On the other hand, they increase while expats are abroad,” Irsheid said.

He noted that the new tax in Saudi Arabia, the largest host of Jordanian workers, will gradually become a burden that causes expats to move to other countries in the region, such as the UAE.

The total value of remittances of Jordanians abroad reached around JD2.68 billion last year, according to the CBJ.

Official figures estimate the number of Jordanian expatriates at around 750,000, the majority of whom lives in the Gulf states.
Over 300,000 Jordanian workers, mostly professionals and skilled labourers, are based in Saudi Arabia, followed by the UAE, with nearly 200,000 people, according to the CBJ.

up
102 users have voted.

Add new comment

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
2 + 12 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Newsletter

Get top stories and blog posts emailed to you each day.