Drop in expats’ remittances not worrying — economists

AMMAN – Analysts see the drop in remittances from Jordanians working abroad in the first two months of this year –– for the first time in years –– as not alarming. 

According to Central Bank of Jordan (CBJ) figures, remittances of expats in the January-February period stood at JD382 million, nearly JD18 million or 4.5 per cent less than they were during the same period of 2015. 

As the majority of Jordanians abroad work in oil-rich Gulf countries, analysts noted that the drop in cash transfers was not related to economic conditions in the Gulf, which have been making lower revenues due to the decline in international oil prices. 

Economist Mazen Irsheid attributed the remittances slowdown to the strong performance of the US dollar as it hit a 12-year high against a basket of currencies late last year. The dollar has recently started to back off, he told The Jordan Times on Monday. 

«Although the currencies of Gulf countries are pegged to the dollar, they were affected by the weight of the strong dollar,» Irsheid said, adding this was the main reason for the drop in remittances. 

The exchange rate of the dollar against a basket of currencies started to ease, which would reflect positively on cash transfers of expats into the Kingdom, he added, noting that despite the current economic challenges facing Gulf countries, no massive layoffs involving Jordanians were reported.

Analyst and columnist at Al Rai daily Issam Qadamani agreed with Irsheid that Gulf countries still prefer Jordanian professionals in public and private sectors. 

«We see ads in newspapers everyday for Gulf employers seeking professionals from Jordan in all fields,» Qadamani said. 

He said that the decline in remittances might be linked to change in priorities for expats, who may prefer to buy properties in the Kingdom rather than depositing at banks. 

Qadamani also agreed that the strong performance of the US dollar had its impact on remittances, but expected transfers to recover in the coming months, particularly in the summer season. 

«This drop is not alarming at all,» he added. 

Remittances of Jordanians abroad reached around JD2.7 billion last year, according to the CBJ. 

Official figures estimate the number of Jordanian expatriates at around 750,000, the majority of whom live 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, the figures say.