DOHA: World Bank figures show that worker remittances from Qatar fell by a huge 10 percent to $10bn last year over 2013, with exchange house officials attributing the decline to rising cost of living in the country.
Worker remittances totaled $11.14bn in 2013, according to Qatar Central Bank (QCB) data
The double-digit dip in overseas remittances routed by expatriates has taken many in the local foreign exchange market by surprise as the country’s population has been growing due to rising influx of foreign workers.
Also based on this growth worker remittances have been showing an upward trend since 2010.
SHOW_GAD
As per World Bank figures, total worker remittances from Qatar stood at $5.58bn in 2010, which went up to $6.67bn in 2011 and $7.77bn in 2012.
“A sharp rise in the cost of living in Qatar seems to have directly impacted worker remittances. House rents and children’s school fees as well as food prices have all gone up here considerably in recent times,” said a senior exchange house official.
“This has reduced the disposable income of expatriates drastically, which has, in turn, dented their ability to send money home,” he said, asking not to be named. “Remittances did not grow in proportion to the population increase last year.”
The real estate sector here has seen strong growth due to the huge influx of expatriates. A sharp increase in demand for apartments and villas, as a result, has seen rents rise steeply.
“As per the current annual rent contract, I am paying QR3,200 per month for a one bedroom-hall-kitchen flat, but my new rent, after renewal (of the contract), will be around QR4,000 per month. There is no increase in my salary this year, which means I will be able to send less money back home,” said an expatriate living in Al Wakra.
Experts said delays in payments to contractors and use of other instruments to send money was also responsible for the fall in remittances.
“Apart from sending money through official channels like banks and exchange houses, many expatriates send money through illegal means such as ‘hundi’. This is popular with people sending money from Saudi Arabia and the United Arab Emirates,” said the branch manager of an exchange house.
“Last year, we heard about delays in payments to contractors, which delayed the payment of salaries to their employees. This might have also led to the decline in remittances last year,” he said.
Going forward, the remittance sector is keeping its fingers crossed as experts expect remittances to be subdued in 2015. The fall in the prices of oil will impact Gulf countries and Qatar is also likely to be affected. Remittances are unlikely to see bullish growth in the current year.
