Oman’s remittance outflows – the money sent home by expatriate workers overseas to their families and friends – have dropped sharply to the lowest level in seven years because of the economic slowdown and decline in the number of foreign workers in the sultanate in past few years.
Worker remittances from the sultanate last year dropped by 8.3 per cent to RO3.51bn, the lowest level since 2013, compared with RO3.83bn in 2018, the data published by the Central Bank of Oman (CBO) in its latest quarterly statistical bulletin showed.
Remittance outflows from Oman have been on a downward trend since their peak in 2015 when worker remittances stood at RO4.22bn, according to the CBO data.
Similar to other oil-producing countries in the Gulf region, Oman has witnessed slower economic growth since 2016 due to sharp declines in oil prices which forced many companies to downsize their operations and reduce the number of expatriate workers.
Additionally, the recent COVID-19 pandemic has hit Oman’s economy and the private sector hard, forcing companies to reduce the number of workers and cut employees’ salaries.
During the first seven months of 2020, more than 170,000 expatriate workers have left Oman, mainly due to loss of jobs.
The total number of expatriate workers decreased by nearly ten per cent in the past seven months to 1.54mn in July 2020 from 1.71mn workers at the end of 2019, according to the data released by the National Center for Statistics and Information (NCSI).
Remittance outflows from the GCC countries are expected to decline sharply this year also due to the economic downturn induced by the COVID-19 pandemic and weak oil prices.
As the coronavirus pandemic and world-wide lockdowns have hit the world economy hard, global remittances are projected to decline sharply by about 20 per cent in 2020, according to the World Bank.
‘The projected fall [in global remittances], which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country,’ the World Bank said in its latest Migration and Remittances report.
The sharp decline in remittance outflows from the Gulf Cooperation Council countries, according to the World Bank, is driven by the economic slowdown due to the coronavirus outbreak as well as falling oil prices.