UAE .. Workers' remittances decline by $ 2 billion and these are the reasons

The total remittances of UAE workers abroad fell by 4.2% year-on-year during the second quarter of this year, the third consecutive year, official data showed.

Remittances amounted to 42.5 billion dirhams ($ 11.6 billion) in the April-June period, up from 44.4 billion in the same period in 2018, data from the UAE central bank showed.

Remittances also declined in the second quarter by 12 per cent to 38.4 billion dirhams ($ 10.45 billion) and in the fourth quarter of 2018 by 7.6 per cent year-on-year to 39.9 billion.

In the first six months of this year, remittances in the UAE fell 8.5 percent to 81 billion dirhams ($ 22 billion) in the first half of this year from 88 billion during the same period last year.

Foreigners make up 83% of the UAE's population of about 9.5 million, many of them from South Asian countries such as India, Pakistan and Bangladesh.

The UAE, according to World Bank data, is the world's third largest source of remittances after the United States and Saudi Arabia.

Indians, according to the UAE Central Report, accounted for the largest share of remittances by 37.2%, Pakistanis 10.5%, Filipinos 7.2%, Egyptians 6.3% and British 3.8%.

Slowing employment
The UAE Central Bank report described the decline in the second quarter of this year as a "significant decline compared to the growth rate in the same period of 2018," and said that this slowdown was in line with the slowdown in employment.

The decline occurred despite central bank data suggesting that the real effective exchange rate, which takes inflation differentials between the UAE and its trading partners, rose 0.3 percent in the second quarter of this year.

Official data show that the number of employees in the UAE private sector amounted to about 5.1 million in the second quarter of this year, 26.9% of them work in Abu Dhabi and 51.6% in Dubai. The real estate, construction and services sectors account for 43% of the total employment in the UAE.

The same data indicates that employment growth in the UAE has slowed, with employment rising by 0.5% in the second quarter of this year, from 1.2% in the preceding quarter.

While employment in Abu Dhabi fell 0.2% in the second quarter of 2019, Dubai increased by 0.6%, but remained below the 1.3% level recorded in the first quarter of the year.