Expat remittances hit seven-year low in 2020: CBO

@conradprabhu –

Remittances by expatriate workers slumped RO 3.373 billion in 2020, the lowest since 2013, the Central Bank of Oman (CBO) revealed on Wednesday. It attributed the decline to broader pandemic impacts which, among other things, led to stagnant wages and a steep 15.4 per cent fall in expatriate numbers in 2020.

The apex bank stated in its 2020 Annual Report, published this week, that expatriate remittances declined four per cent to RO 3.373 billion in 2020, down from RO 3.512 billion in 2019. Remittances have been on a downward trend since 2015, when outflows hit a peak of RO 4.226 billion.

The slide in remittance outflows provided a bit of relief to the apex bank in the management of the country’s current account, which had come under pressure due to the sharp fall in international oil prices as well as a decline in exports amid the pandemic.

“The current transfers consisting mainly of workers remittance declined amidst stagnant wages and falling expatriate population, providing some cushion to external sector management. As a result of these developments, the Current Account Deficit (CAD) increased to RO 3.330 billion in 2020 from RO 1.639 billion in 2019,” the Central Bank noted.

A contracting economy attributable to the oil price collapse and the pandemic led to a 15.4 per cent decrease in the total size of the expatriate population in employment in the Sultanate of Oman in 2020, the apex bank stated.

According to figures released by the National Centre for Statistics and Information (NCSI), an estimated 270,000 expatriate workers (and their dependents) left the Sultanate of Oman during 2020.

While expatriate remittances will still remain a reality of the financial landscape in the Sultanate of Oman, as is the case elsewhere around the world with large migrant workforces, some experts see outflows easing a bit in response to government-led initiatives to incentivize local investment.

The introduction of Real Estate Investment Trusts (REITs), foreign ownership of apartments in designated areas, and more recently, crowdfunding opportunities, will open up avenues for expatriates to consider investing part of their earnings in the local market, they point out.