THE IMPACT OF EXPATRIATE WORKERS’ REMITTANCES ON THE CURRENT ACCOUNT OF BALANCE OF PAYMENTS IN JORDAN

Tawfiq Ahmad Mousa, Nawaf Alghusin, Ayman Al-Smadi

Abstract


Expatriates’ remittances have grown continuously starting from 1.179 million JD in 2000 to 2.365 million JD in 2016 which is 49.8% growth. Remittances have a significant participation in the current transfer of Balance of Payments (BOP) of Jordan. It is acknowledged that remittances are very important source of foreign currencies and thus serves as a stable source to reduce the deficit of current account of BOP. It is worth mentioning that expatriates’ play a vital role in the economic growth of a country as it is one of the largest sources of foreign currency and for the period under study, remittances covered more than 14% of imports. The objective of this paper is to investigate the role of remittances in reducing the current account deficit in Jordan. Multiple regression analyses, in addition, Pearson correlation matrix was used to show the relationships between the steady growths of remittance and improvement of current account deficit and found the significant positive relation.


Keywords


Expatriates’ remittances, Balance of payments; Current account; Current transfers

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