Further population growth in the UAE is expected to increase remittances from the UAE by 7 to 8 per cent over the next two years, HSBC told Gulf News.
Dubai’s hosting of the World Expo will be a major catalyst for the remittance market, as it will attract more expatriates into the country and drive the GDP, employment and private sector growth higher.
The World Bank estimates that global remittances will reach $550 billion (Dh2 trillion) this year and more than $700 billion by 2016. “The Middle East is expected to form a key part of this growth,” said Gifford Nakajima, regional head of wealth development at HSBC Bank Middle East.
Nakajima noted that the core business sectors in the UAE have already shown signs of recovery over the past few years and the UAE’s remittance market has likewise expanded at a strong pace.
“As we expect the country’s core business sectors to continue performing strongly, with non-oil GDP set to expand by 4.5 per cent this year and employment expected to continue rising, it is likely that the UAE’s remittance market will also continue to expand over the next few years,” Nakajima said.
More expatriates are expected to come to Dubai for work in the run-up to Expo 2020. It is estimated that more than 200,000 jobs will be generated between 2013 and 2021, and some Dh26 billion will be poured into the infrastructure sector.
“As a majority of these [jobs] are expected to be in the country’s thriving private sector, we will see a significant increase in the number of expats in the UAE. This will clearly have a substantial impact on increasing remittance inflows and outflows, which are heavily dominated by the country’s expat population,” Nakajima said.
Nakajima noted that more expats from India and other Asian countries will to come to Dubai to benefit from Expo-related opportunities. India and China alone are the world’s biggest remittance destinations with a total remittance market valued at $131 billion.