Foreign Worker Remittances Decline in Bahrain Despite Rising Employment

TDT | Manama

The Daily Tribune - www.newsofbahrain.com

Recent data from the Central Bank of Bahrain presents a nuanced picture of foreign worker remittances from the Kingdom. While the first quarter of 2024 saw a slight 2.1% decline in remittances, totalling approximately 230.7 million Bahraini dinars compared to 235.6 million dinars in the corresponding period of 2023, this reduction occurred against a backdrop of increasing foreign worker employment.

Statistics from the Labour Market Regulatory Authority (LMRA) reveal that the number of foreign workers in Bahrain reached 616.1 thousand at the end of December 2023, marking a 5.8% year-on-year increase. Additionally, the LMRA issued a total of 45,000 new work licences for foreign workers in the last quarter of 2023, up 12.2% from the same period in 2022. This suggests growing economic activity in the Kingdom, which could be expected to drive an increase in remittances.

Several factors may be contributing to the observed decline in remittances. The global economic slowdown may be impacting remittance patterns, as workers send less money back home due to economic uncertainty. Furthermore, the composition of the foreign worker population may be shifting, with a higher proportion of workers coming from countries with lower average remittance rates. Finally, rising living costs in Bahrain may be putting pressure on foreign workers' disposable income, leaving them with less to send home.

Despite this reduction in remittances, the outflow of foreign currencies continues to exert pressure on Bahrain's balance of payments. However, the Kingdom has maintained positive rates of surplus, strengthening its position against any increase in external financial obligations.

The contracting sector remains the largest employer of foreign workers in Bahrain, with nearly a quarter of new labour licences issued in the last quarter of 2023 going to this sector. This demonstrates the crucial role that foreign labour plays in supporting the Kingdom's economic development.