Eight in 10 UAE residents continue to remit money despite Covid-19 financial challenges

More than half of respondents are sending less money back home compared with the same time last year, new survey finds

A majority of UAE residents continue to regularly send money home to meet financial commitments despite the economic difficulties caused by Covid-19, according to a new survey.

However, almost half of the respondents (41 per cent) said they were remitting less money compared with the same period last year, according to the survey conducted by financial comparison site yallacompare, which polled more than 2,300 people.

The average monthly amount being remitted by UAE expatriate residents this year ranges between Dh1,000 and Dh1,999, the survey found.

"An enormous majority – 83.5 per cent – are still opting to send money home regularly, highlighting that many expat workers are still able to uphold some form of financial commitments despite economic flux," yallacompare said.

Outward personal remittances by expatriates in the UAE edged down to Dh79.6 billion in the first six months of 2020 compared with Dh80.96bn in the previous corresponding period, according to the Central Bank of the UAE.

On Thursday, the World Bank said it expects global remittances to drop 7 per cent this year to $508 billion, which is an improvement on the 19.7 per decline it forecast in April. However, it also expects remittances to fall by a further 7.5 per cent in 2021 to $470bn, as opposed to its previous estimate of a 5.6 per cent rebound.

The declines in 2020 and 2021 will affect all regions, with the steepest drop expected in Europe and Central Asia (by 16 percent and 8 percent, respectively), followed by East Asia and the Pacific (11 percent and 4 percent), the Middle East and North Africa (8 percent and 8 percent), Sub-Saharan Africa (9 percent and 6 percent), South Asia (4 percent and 11 percent), and Latin America and the Caribbean (0.2 percent and 8 percent), the Washington-based lender said.

“Migrants are suffering greater health risks and unemployment during this crisis,” said Dilip Ratha, lead author of the World Bank's latest remittance report. “The underlying fundamentals driving remittances are weak and this is not the time to take our eyes off the downside risks to the remittance lifelines.”

According to the yallacompare survey, financial worries and job security concerns resulted in 41.4 per cent of UAE residents saving a portion of their salary every month during the second quarter of this year, compared with 58 per cent in the same period in 2019.

A YouGov survey in July found that a majority of people in the UAE are still actively reducing their non-essential expenses as they deal with the financial implications of the virus. However, the YouGov survey also found that one third of people in the UAE expect their finances to improve in a year’s time.

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