What will happen to Expatriates in Saudi Arabia after 2017?

According to a study, economic experts have predicted that the expatriates in Saudi Arabia will eventually start to move out of the country as the Saudi economy has started to decline. The main reasons for the decline are the decreasing oil prices and the ongoing war in Yemen. Saudis are heavily dependent on expatriate workers.

This will cause the population structure of the country to change and it is expected that around 2 million expats will depart from Saudi Arabia by the first quarter of the next year (2018).  The main reason for this departure will be the increase in taxes and fee imposed by the government on the expatriates, which many of them will not be able to cope with.[irp]

Apart from this the government also plans to reduce subsidies on fuel, electricity, cooking gas, baby milk, bread, and medicines.  It is predicted that another 2.5 million will leave the country after not being able to cope up with these subsidies, imposed fees, and taxes.

The departure of expatriates shall encourage the local professionals to take up jobs in different sectors. It is also expected that the Saudis will work in places where they have never worked before. By the end of 2019, only those expats who are having high salaries and less than 4 family members will be allowed to stay in the country.

This departure of expats from the country will affect the different sectors such as nutrition, catering and real estate.

The rents will decrease by 50% and companies might wipe out completely if they cannot withstand this economic shock.

This will further extend towards the courier, airlines, car dealerships and construction companies.

All of this not only has an impact on the lives of expats but also on the locals. The locals will tend to reduce their expenses by shifting their children from private to government schools and moving to less expensive houses or apartments.

The car agencies will not have to suffer a lot as women are allowed to drive in Saudi Arabia now. It is expected that the automobile market will see a significant growth in the year 2018.

Furthermore, buying and selling of consumer electronics will reduce which will cause many companies to shut down. Usage of second-hand products will increase such as mobile phones and cars.

Foreigners will tend to transfer their property to citizens in orders to avoid increased taxes and fees, they will also look for a way out.

Many food chains and restaurants are predicted to close because of few customers and low profits.  Due to the depressed economy, even the bigger food chains like Mcdonald’s and Kentucky are expected to close down many of their branches.

The people will start adjusting to the situation by the start of 2020 and will have to settle in with a lifestyle that they had not experienced before. By the end of 2020, it is the goal of the government to put the economy back on track, even though the measures taken to do it might be strict with negative consequences for expatriates. The expatriates need to be careful as to what decisions they are going to make.

  • Joe Bridge

    I can’t undestand why the Kingdom does not invest more in Solar Enery Farms, whilst they have the money, only 1% of power is generated by solar power – If revenue is falling from oil profits – power from the sun is an excellent and powerful resource for export and could be used to run desalination plants, increasing the viability of farming in the desert regions.

  • Solar Energy is one of the most expensive options these days.