Oman’s remittance outflows – the money sent home by expatriate workers to their families and friends – have dropped to the lowest level in eight years due to economic slowdown induced by the COVID-19 pandemic and sharp drop in the number of foreign workers in the sultanate.
Worker remittances from Oman last year dropped by 4 per cent to RO3.37bn, the lowest level since 2012, compared to RO3.51bn in 2019, as per the data published in the Statistical Year Book 2021, which has been released by the National Centre for Statistics and Information (NCSI).
Remittances from the sultanate have been on a downward trend since their peak in 2015 when worker remittances stood at RO4.22bn, the official statistics showed.
The last year’s decline in remittances is largely due to a fall in the wages and employment of expatriate workers. The 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.
“The drop in remittance volumes is a cause of concern for money exchange/transfer businesses. The sharp fall in the number of expatriate workers and salary reductions are the main reasons for decline in remittances. Many people who got stuck in their home countries due to travel restrictions couldn’t get salaries,” said Amit Talukdar, general manager at Global Money Exchange.
Oman’s expatriate worker population last year dropped by 15.7 per cent as nearly 270,000 workers left the sultanate in 2020, mainly due to loss of jobs. Over 125,000 of those who left were from India.
According to the NCSI data, there were 1,712,798 expatriate employees working in various sectors in the sultanate at the end of 2019.
This number dropped to 1,443,128 at the end of December 2020 with 269,670 expatriates leaving Oman in the year 2020.
“Amid ongoing economic uncertainty and delay in salary payments, there is a tendency that expatriate workers want to keep savings with them to meet any eventuality here. This behaviour is causing a further decrease in money transfer volumes,” Talukdar said.
He does not expect any growth in remittances from Oman this year too as the businesses are still struggling due to COVID-19 impact and many expatriate workers are still stuck in their home countries due to travel restrictions.
“Once travel restrictions are fully lifted and things start improving in the economy, remittance volumes may start improving from next year,” Talkudar added.
As per the World Bank’s Migration and Development 2021 report, the flow of remittances from the GCC countries is expected to remain weak in 2021.