How the Middle East conflict develops will determine the long-term remittance business from the Gulf states
The Gulf countries in the Middle East, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, host a vast expatriate workforce. The current estimates place approximately 7.5 million Bangladeshi, nine million Indians, and around one million Pakistani employed across the region. Additionally, overseas Filipino workers (OFWs) constitute a significant presence, with nearly 80% of this demographic working across the Gulf States.
These workers regularly send a substantial portion of their earnings home to support their families. Based on GlobalData’s Remittance Analytics Database, between 2020 and 2024, remittances from the UAE alone to these four countries totaled $43.3bn in 2024 or an increase of $11.7bn or a CAGR of 8.3% over a four-year period from $31.6bn in 2020.
With the current conflict between the US, along with Israel and Iran, there has already been reports of fatalities among foreign workers, with many more left stranded and facing uncertainty regarding their wages and continued employment. In the immediate aftermath of the crisis, remittance service providers observed a sharp spike in transactions attributed to workers taking precautionary measures by sending their accumulated savings back home.
However, this initial surge is expected to be temporary and if the conflict becomes prolonged, the economic repercussions within the Gulf States are projected to be severe. Such a scenario would cause a softening of the financial flows in outward remittances.
The financial technology and money transfer sectors are currently experiencing a volatile and uncertain landscape as a direct result of the regional conflict. Key players facilitating the flow of remittances from the Gulf States, including BRAC Bank, Wise, Remitly, UPI-based services, Western Union, PakPay, and GCash, have become critical conduits for the anxious expatriate community from South Asia and the Philippines. The development of the conflict will determine the longer-term outlook for these remittance service providers.
Arnie Cho is a senior analyst, banking & payments, at GlobalData
“How the Middle East conflict develops will determine the long-term remittance business from the Gulf states” was originally created and published by Electronic Payments International, a GlobalData owned brand.
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