Saudi Arabia remains top contributor to Pakistan’s remittances during current fiscal year

Saudi Arabia remains top contributor to Pakistan’s remittances during current fiscal year
A man enters a foreign currency exchange shop in Islamabad on July 11, 2023. (AFP/File)
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Updated 12 February 2024
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Saudi Arabia remains top contributor to Pakistan’s remittances during current fiscal year

Saudi Arabia remains top contributor to Pakistan’s remittances during current fiscal year
  • Pakistan received $3.8 billion in remittances from Saudi Arabia during seven months of current fiscal year, says central bank
  • Financial expert says workers’ remittances for current fiscal year likely to increase during Eid days when laborers remit more money

KARACHI: Saudi Arabia remained the largest source of workers’ remittances to Pakistan in the seven months of the current fiscal year, data shared by Pakistan’s central bank showed on Monday, with Riyadh contributing $3.8 billion out of the total $15.8 billion received by the South Asian country from July 2023 to January 2024. 

Saudi Arabia remains among the top destinations for Pakistani laborers who remit money back to their families. Workers’ remittances are important for Islamabad as it reels from an economic crisis that has seen its reserves plummet to low levels and its currency weaken against the US dollar, forcing it to seek financial assistance from global lenders and friendly countries. 

Pakistan received $2.4 billion in remittances during January 2024, 0.6 percent higher compared to December 2023 and 26.2 percent higher compared on a year-on-year basis, the State Bank of Pakistan said in a press release. The central bank said Pakistan received a total of $15.8 billion during the first seven months of the current fiscal year, with remittances from Saudi Arabia clocked in at $3.8 billion, from the UAE at $2.7 billion, while Pakistani workers from other Gulf countries remitted $1.7 billion in the same period.

“Remittance inflows during Jan. 24 were mainly sourced from Saudi Arabia ($587.3 million), United Arab Emirates ($407.6 million), United Kingdom ($362.1 million) and United States of America ($283.4 million),” the SBP said in a press release. 

Pakistan received $27.3 billion in total during the last fiscal year, which included $6.5 billion from Saudi Arabia, $4.6 billion from the UAE, $3.2 billion from other Gulf countries, $3.1 billion from the EU countries, and $3.2 billion from the US. The South Asian country recorded its highest remittance inflows of $31.3 billion in fiscal year 2022.

Tahir Abbas, head of research at Arif Habib Limited, said Pakistan’s remittance inflows were increasing due to the government’s recent crackdown against illegal money transfer systems such as hawala and hundi. 

“The inflows are improving due to action taken by authorities against illegal channels,” Abbas told Arab News.

Pakistan has set workers’ remittance inflow target for the current year at $28.5 billion. 

Abbas believes Pakistan will see a further surge in workers’ remittances as the Muslim festivals of Eid Al Fitr and Eid Al Adha will fall within the current fiscal year. 

“The second half of the current fiscal year would be much better due to seasonal impacts, as workers traditionally send more remittances to their families back home,” he explained. 


Day 2 of LEAP24 sees $848m investments across 7 new funds 

Day 2 of LEAP24 sees $848m investments across 7 new funds 
Updated 8 sec ago
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Day 2 of LEAP24 sees $848m investments across 7 new funds 

Day 2 of LEAP24 sees $848m investments across 7 new funds 

RIYADH: Investment funds worth $848 million were announced on the second day of Saudi Arabia’s international technology conference, LEAP, in a major boost for the region’s venture capital ecosystem.

The money will be split across seven entities, as the third edition of the event continues to witness several significant announcements that seek to transform the technology sector locally and globally. 

Kicking off the day, InvestCorp announced the establishment of a $500 million fund in Saudi Arabia, which includes a $35 million investment from Saudi Venture Capital Co.

The fund will focus on investing in Saudi companies in their growth stages. 

In another boost to emerging companies, Saudi Arabia’s Takamol Holding announced their venture capital arm, Takamol Ventures, equipped with a $53 million investment.

The VC is established to support early-stage technology companies in the Middle East and African markets. 

Similarly, Oasis Capital unveiled their “Oasis Fund II,” a $100 million venture dedicated to empowering international tech founders in their early stages.


UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global

UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global
Updated 57 min 27 sec ago
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UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global

UAE’s PMI grows but Egypt’s index falls to 11-month low: S&P Global

RIYADH: The UAE’s non-oil private sector expanded in February as it delivered the strongest output growth since June 2019, according to S&P Global’s purchasing managers’ index report.

The analysis saw the Middle Eastern country given a PMI standing of 57.1 – up from 56.6 in January – with increased new business, more robust client activity, and intensified marketing and development efforts contributing to this growth.

A PMI above 50 indicates that the sector is expanding, while below that number suggests contraction.

Meanwhile, business activity in Egypt’s non-oil private sector declined at the sharpest rate in just over a year, with the PMI dropping from 48.1 in January to 47.1 in February, according to S&P Global Egypt PMI. This marked the lowest level in 11 months and is weaker than the survey’s long-run trend.

The drop in activity can be attributed to several factors, including the worsening foreign exchange crisis as the sharp decline in Suez Canal trade due to Red Sea shipping disruptions exacerbated shortages of the US dollar and other foreign currencies. 

This, in turn, led to substantial increases in purchasing costs and contributed to the most significant lengthening of supplier delivery times since June 2022.

“Red Sea shipping disruption has roughly halved Suez Canal revenues so far in 2024, which February PMI survey data indicated had a considerable impact on foreign currency inflows and inflationary pressures,” said Senior Economist at S&P Global Market Intelligence, David Owen.

Supply chain disruptions from Red Sea shipment issues were also a challenge to the UAE private sector, leading to input delivery delays and a backlog of work. However, according to the report, supplier performance remained generally positive, with prompt input distribution when requested.

“One of the PMI’s largest components, the output index, rose to its highest level since June 2019, pointing to a rapid expansion of business activity ... capacity pressures were apparent, however, with backlogs of work rising at their fastest pace in nearly four years, as Red Sea shipping disruption fed through into transport delays,” Owen commented.

Consequently, hiring activity accelerated to manage workloads and address backlog growth, increasing employment levels at the fastest rate since May 2023, as reported.

While overall input costs rose in the UAE, driven by increases in material prices and wages, firms opted for price cuts. This strategy was aimed at retaining market share, often achieved through offering discounts to clients, according to the report.

In contrast, Egyptian companies opted to transfer increased purchase costs to customers, resulting in a sharp increase in selling charges, the most significant in 13 months. Consequently, new orders experienced the fastest decline since March 2023, particularly in domestic sales facing mounting price pressures.

Heightened inflationary pressures, particularly in wages, were noted as Egyptian firms raised salaries in response to the cost-of-living crisis. Consequently, there was a decrease in hiring activity within the non-oil private sector in the first quarter, with recent data indicating a slight decline in workforce numbers, according to the report.


PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 

PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 
Updated 05 March 2024
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PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 

PIF’s Alat and KACST ink deal to propel Saudi Arabia’s semiconductor industry 

RIYADH: Semiconductor manufacturing in Saudi Arabia is to be boosted by workers from the Kingdom after Public Investment Fund company Alat signed a partnership to drive localization.

Inked with the King Abdulaziz City for Science and Technology, the deal aims to support national goals for research, development, and innovation in the energy and industry sectors by developing local capabilities, while positioning the Kingdom as a global hub for the strategic semiconductor industry. 

Signed at LEAP 2024 in Riyadh, the partnership agreement, inked by Muneer bin Mahmoud Al-Dosouqi, president of KACST, and Amit Midha, CEO of Alat, aligns with Saudi Vision 2030 goals for economic growth and diversification. 

Midha said: “Alat aims to enable the establishment of next generation industry in Saudi Arabia, and by partnering with a renowned institution such as KACST, with its deep expertise in advanced technologies and talent development, we will play an essential role in the creation of Saudi Arabia’s own semiconductor industry.” 

The agreement with KACST will be spearheaded by Alat’s Semiconductor Business Unit, overseeing the development and manufacturing of chips in three pivotal technology segments: power, perception, and processing. 


Minister launches digital products and services to support families during LEAP

Minister launches digital products and services to support families during LEAP
Updated 05 March 2024
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Minister launches digital products and services to support families during LEAP

Minister launches digital products and services to support families during LEAP

RIYADH: Saudi families are set to gain easy access to a diverse range of social and digital support services, according to the human resources and social development minister.

The offerings and products were unveiled by Ahmed bin Sulaiman Al-Rajhi on March 4 during LEAP 2024, the ongoing third edition of the world’s biggest tech event in Riyadh.

They were aimed at advancing the ministry’s digital transformation agenda and simplifying access to services for beneficiaries, according to the HRSD website.

The offerings encompassed the family guidance system and consultations, facilitating access to counsellors through accredited specialists. Additionally, the social specializations system was launched, overseeing the issuance and management of licenses for specialists, and validating their professional classifications.

The introduction of the family protection system facilitates the registration and monitoring of reported cases through integration with relevant security authorities, ensuring the confidentiality and safety of both beneficiaries and reporters.

Al-Rajhi also initiated the empowerment service on the social support and protection platform, with the goal of empowering and preparing social security beneficiaries for employment through customized training programs aligned with their educational qualifications and skill sets.

The support platform, which assisted over 100,000 young people in 2023, offers training opportunities for beneficiaries to enhance their cognitive skills, with a focus on aligning labor market needs with job seekers, assisting startups and small businesses, and enhancing the well-being of social security beneficiaries.

The services also included business management, aiming to facilitate business practice procedures to be automated and integrated between relevant entities through the Qiwa platform, aiming to improve beneficiary experience and maintain business continuity, in integration with 13 government entities.


Saudi Arabia’s non-oil sector hits 5-month high as PMI soars to 57.2

Saudi Arabia’s non-oil sector hits 5-month high as PMI soars to 57.2
Updated 05 March 2024
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Saudi Arabia’s non-oil sector hits 5-month high as PMI soars to 57.2

Saudi Arabia’s non-oil sector hits 5-month high as PMI soars to 57.2

RIYADH: Saudi Arabia’s non-oil economy exhibited improved growth, with business activity accelerating at the fastest rate in five months, as indicated by an economic tracker.  

The Kingdom’s Purchasing Managers’ Index rose to 57.2 in February, marking a notable improvement from a two-year low in January. This uptick signals a significant improvement in the operating conditions of the non-oil private sector, according to the Riyad Bank Saudi Arabia PMI report by S&P Global.  

The firm’s chief economist Naif Al-Ghaith attributed the rebound of the PMI in February to robust growth in output and new orders, particularly driven by the services and construction sectors.  

“The upturn reflected the continued thriving of non-oil activities in the Kingdom which recorded a 4.6 percent increase according to GASTAT (General Authority for Statistics) flash estimates. The survey results also signalled expectations of a modest recovery in demand this year driven by the acceleration of Vision 2030 projects,” he added.  

The report also noted that this reading is the highest since September 2023, attributed to an improvement in client demand and indications of increased tourism activity.  

New export orders also exhibited a modest rebound, a trend credited by Al-Ghaith to the rising demand for domestic products in international markets and the high competitiveness of local industries. This suggests potential expansion in production and employment opportunities, according to the economist. 

While new work inflows accelerated compared to January, with reports indicating stronger market conditions and an increase in new clients, some firms mentioned that heightened competition had a dampening effect on sales growth. 

The report also highlighted a surge in employment, growing at the fastest pace in eight years, which led companies to make a solid cut to their outstanding work. 

This growth is attributed to the increase in new business and the positive outlook of firms regarding future demand. This optimism has also led firms to secure a steady flow of inputs at discounted prices from suppliers, resulting in inventory levels reaching the highest point since August 2022, as per the report. 

In terms of input price inflation, the recent survey by S&P Global indicated a slight easing in February. Costs continued to rise significantly overall, albeit at the slowest pace since July of last year. 

Selling prices rose marginally as some firms passed on higher costs to customers, while others lowered fees due to increased competition. This resulted in prices lagging behind cost increases, putting pressure on margins, the report added.